Identifying Trade Symmetrical Triangle Patterns

The symmetrical triangle pattern is usually a technical pattern of trend continuation, like other trend continuation patterns, it represents a pause in the current trend, which then resumes its original direction. The minimum requirement for a triangle to form is that there are four points at which the price changes its trend so that we have two points to draw the upper line of the triangle and two points to draw the lower line of the triangle.

symmetrical triangle pattern

In the case of being a triangle with bearish implications and preceded by a bearish trend, point 1 must be lower than point 3 and point 2 must be higher than point 4, as we see in the image. And in the case of being a triangle with bullish implications and preceded by a bullish trend, point 1 must be higher than point 3, and point 2 must be lower than point 4.

Vertex showing the time resolution of the triangle's resolution

The symmetrical triangle pattern has a time limit for its resolution, and it is the point where both lines intersect, also known as the vertex. As a general rule, the price should break the triangle in favor of the trend between two-thirds and three-quarters of the horizontal width of this technical figure. The projection goal of this figure is the length of the figure itself as seen in the upper image.

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Like most technical figures, the volume should decrease as the price oscillates within the triangle and once the triangle breaks the corresponding line there should be a noticeable increase in volume.

real triangle

In the upper image, we can observe a symmetrical triangle pattern with bullish implications in the weekly chart that took place in USD/JPY weekly chart.

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FAQ

What role does volume play in symmetrical triangle pattern?

During the triangle formation, the volume should decrease as the price moves within it. However, once the triangle is broken, there should be a noticeable increase in volume to confirm the breakout.

Can the duration of a symmetrical triangle provide any insights into its potential breakout direction?

The duration of a symmetrical triangle can offer hints about the breakout direction. Typically, the longer the consolidation period, the stronger the potential breakout. However, it's essential to consider other technical indicators and market conditions for confirmation.

How can I determine a target price projection after a symmetrical triangle breakout?

To estimate the target price projection, measure the widest distance of the triangle's base (the horizontal width) and project it from the breakout point in the direction of the breakout. This projected distance can provide a rough target for the subsequent price move.

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