It's been so long I haven't posted an educational post on Trading View... so I thought of posting a simple educational material that could be explained easily. The symmetrical triangle is one of the most commonly used patterns in trading and could be hugely profitable if used correctly.
So what is a "symmetrical triangle"?
The symmetrical triangle usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows. When these points are connected, the lines converge as they are extended, and the symmetrical triangle takes shape. Regardless of the nature of the pattern (continuation or reversal) the direction of the next move can only be determined after a valid breakout.
So here is how you can set the price target after a valid breakout. There are two ways to estimate the extent of the next move after the breakout.
1. The widest distance of the symmetrical triangle can be measured and applied to the breakout point (highlighted in purple).
2. A can be drawn parallel to the pattern's that slopes (up or down) in the direction of the break (highlighted in green).
Hope that helps, and it would be great if I can see some examples. Let me know if you have any further questions in the comment section below.
Thank you and have a great day!
Just some thoughts :)
Regarding the breakout, regardless of the nature of the pattern (continuation or reversal), the direction of the next move can only be determined after a valid breakout. Adding to the wave structure of a triangle, this is a totally different topic, so I wouldn't want to discuss it and make things complex for other. But I do agree and here is an example of an ABCDE pattern.
Thanks again :)!
Have a great day.