Home | Previous | Next Lesson This Lesson Can Be Printed - See Instructions Below. Symmetrical TrianglesSymmetrical chart patterns can be found in almost any market and any time frame. They normally signify some indecision in the market and as the pattern develops it is common to see a decrease in volume. The pattern forms as the bar's highs and lows inside the triangle converge so as to outline the shape of a triangle. Symmetrical triangles have a tendency to break in the direction of the preceding trend and are often accompanied by heavy volume. Although this is often the case it is not a given and regardless of the direction of the break there are normally good opportunities to trade the breakout.
In the example of the Japanese Yen (see second chart) point 1 was 111.71 and point 2 was 102.00 which gave us a base of 9.71. The breakout occurred at approximately 108.90. If we add 9.71 to 108.90 it gave us a target of 118.61. Although symmetrical triangle can often mean continuation of the trend this particular triangle (second chart) formed at the end of a downtrend and broke up.
Good Trading Mark McRae
PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/ Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our disclaimer. To PRINT or save a copy of this lesson in PDF format simply click the PRINT link. This will open the lesson in a PDF format which, you can then PRINT. If you are unfamiliar with PDF or don't have a FREE copy of Arobat Reader see instructions. |