Trading Strategies With Triangle Pattern

Trading Strategies With Triangle Pattern. Symmetrical triangle formation is a graph of where there is a slope of the highest price lowest price and slope together converged at a point where it would seem sort of triangle. Where this occurs during the formation of triangles of a trend, that the market is making a Lower high and higher low. This means it can be said that neither the buyer nor the seller will push the market price movement is getting far enough to make a very clear trend. If this is a battle where between buyer and seller, then this will be a battle without winners, alias series. Is this type of consolidation. 

In the image above we can see that both the buyer and seller can push prices toward them. When this happens, we get a lower high and higher low. When the pointy, it means that a breakout is getting closer. We don't know where prices will run, but we know that the market soon will breakout. Finally, one side of the market is going to give up, So how can we take advantage of this? With just a simple answer. We can order above or below the slope with a buy stop or sell stop. Because we already know that the price will breakout, we could hitch a ride wherever prices will move.

In this example, If we place the order entry above the slope. Then you have placed the sell order with pending under the slope then we can shut it down. Ascending Triangle Ascending triangle is the formation of a movement when there is a level of resistance and the lower slope. If there is a certain level where the buyer can not be beyond it. But they gradually began to push upwards for price movements by forming a higher low.

In the image above you can see that buyers are starting to get power because they make a higher low. Where they continue to put pressure on the level of resistance and as a result, the breakout will definitely occur. Now the question is, "where prices will go next? Whether the buyer can solve it or resistance is too strong?" Widely available book charting will tell you that in most cases, the buyer will won the battle and the price will come out past the resistance. However, this is not always the case. Sometimes the resistance level is too strong, and the purchasing power is not too pretty to break through resistance. In this case, I will set the pending buy stop order at the top of the line resistance and pending sell stop order is below the slope.

In this scenario, the buyer loses and prices start diving! You can see that the price drop of about the same distance with the height of a triangle formation. Descending Triangle as you can expect, the Descending triangle is the opposite of the Ascending triangle. For more details, please look at the picture below.

In the image above you can see that it is slowly making a price movement higher low. Chances are the price will eventually penetrate the support and will increasingly continue to decline. However, in some cases, support is too strong, it can make the price will bounce and make a strong movement upwards. The good news is that we don't care where the prices will go. We only know that it will go somewhere. In this case, we will place a pending order on the lines above and below the line of support.

Then in this case ultimately price will breakout over the top of the triangle.

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