How to Trade Triangles.
Updated
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Hello, Traders Investors And Community, here I show the important triangle-formations and how to trade them properly.
These formations come in every-shape from big to small in today's markets and are sometimes quite often spotted.
There are however some important and significant differences in trading them which I explain further.
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1.) Bullish Ascending Triangle
2.) Bearish Ascending Triangle
3.) Bearish Symmetrical Triangle
4.) Bullish Symmetrical Triangle
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________________________________________________________________________________________________________________________________________
1.) Bullish Ascending Triangle
This formation is a typical known textbook bullish uptrend-formation. Normally it develops within a bullish trend and is a continuation-formation. Suggesting
that the bulls make a break before going higher upward. It is formed by the typical horizontal higher boundary with steady-highs and the rising lower
boundary with higher-highs.
It is a logical mechanism that this formation breaks to the upside because the bulls are clearly stronger. The price projection range is taken by the first touch
with the higher boundary and the ground of the lower boundary to project the minimum target in the breakout-zone where the triangle broke out
to the upside. The triangle can be traded with immediate entry and stop-loss below the last low or conservative with the breakout to the upside.
2.) Bearish Ascending Triangle
This formation is the logical and coherent counterpart of the ascending broadening wedge, the main difference here is that it breaks to the upside and is
normally seen as a continuation to the downside. Here we see steady lows with a horizontal lower boundary and lower highs with a declining upper
boundary.
The formation breaks to the downside because the bulls getting weaker every new lower high is formed. When projecting the price to the downside we
can take the measure from the first touch with the lower boundary and the equivalent point with the higher boundary to project our minimum.
target. The triangle can be traded aggressively with entry before the breakdown or with confirmation after the breakdown.
3.) Bearish Symmetrical Triangle
Here we have an interesting formation that must conform to the downside to give us the proper signal that it is actually really a bearish symmetrical
triangle. Here we get lower highs with a descending upper boundary and higher lows with an ascending upper boundary.
This formation has also an end-date, it is the date in which the lower and upper boundary come together which means that the formation has definitely
ended at this date. We can measure our target from the touch with the lower boundary and its equivalent point at the upper boundary. The wisest
way tot trade the triangle is after the breakout and confirmation.
4.) Bullish Symmetrical Triangle
This formation is the bullish counterpart to the bearish symmetrical triangle and the difference here is that we get the first price touch with the upper
boundary indicating a bullish outcome. We see lower highs with a descending upper boundary and higher lows with an ascending lower boundary before
breaking to the upside.
The breakout can be heavy which depends on the time symmetrical triangle has confirmed, the longer we stay in the triangle the stronger the breakout
will be. We will get a minimum target when projecting the first touch of the higher boundary and its equivalent point of the lower boundary to the
point where the triangle broke to the upside. The best way to trade the triangle is after breakout and confirmation of the boundary.
________________________________________________________________________________________________________________________________________
If you like this tutorial feel free to support. I also made an tutorial about broadening wedges which you find when scrolling down on my account.
Will be great to see you there. Have a good day and all the best.
Thank you.
________________________________________________________________________________________________________________________________________
“An investment in knowledge pays the best dividend”
________________________________________________________________________________________________________________________________________
Hello, Traders Investors And Community, here I show the important triangle-formations and how to trade them properly.
These formations come in every-shape from big to small in today's markets and are sometimes quite often spotted.
There are however some important and significant differences in trading them which I explain further.
________________________________________________________________________________________________________________________________________
1.) Bullish Ascending Triangle
2.) Bearish Ascending Triangle
3.) Bearish Symmetrical Triangle
4.) Bullish Symmetrical Triangle
________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________
1.) Bullish Ascending Triangle
This formation is a typical known textbook bullish uptrend-formation. Normally it develops within a bullish trend and is a continuation-formation. Suggesting
that the bulls make a break before going higher upward. It is formed by the typical horizontal higher boundary with steady-highs and the rising lower
boundary with higher-highs.
It is a logical mechanism that this formation breaks to the upside because the bulls are clearly stronger. The price projection range is taken by the first touch
with the higher boundary and the ground of the lower boundary to project the minimum target in the breakout-zone where the triangle broke out
to the upside. The triangle can be traded with immediate entry and stop-loss below the last low or conservative with the breakout to the upside.
2.) Bearish Ascending Triangle
This formation is the logical and coherent counterpart of the ascending broadening wedge, the main difference here is that it breaks to the upside and is
normally seen as a continuation to the downside. Here we see steady lows with a horizontal lower boundary and lower highs with a declining upper
boundary.
The formation breaks to the downside because the bulls getting weaker every new lower high is formed. When projecting the price to the downside we
can take the measure from the first touch with the lower boundary and the equivalent point with the higher boundary to project our minimum.
target. The triangle can be traded aggressively with entry before the breakdown or with confirmation after the breakdown.
3.) Bearish Symmetrical Triangle
Here we have an interesting formation that must conform to the downside to give us the proper signal that it is actually really a bearish symmetrical
triangle. Here we get lower highs with a descending upper boundary and higher lows with an ascending upper boundary.
This formation has also an end-date, it is the date in which the lower and upper boundary come together which means that the formation has definitely
ended at this date. We can measure our target from the touch with the lower boundary and its equivalent point at the upper boundary. The wisest
way tot trade the triangle is after the breakout and confirmation.
4.) Bullish Symmetrical Triangle
This formation is the bullish counterpart to the bearish symmetrical triangle and the difference here is that we get the first price touch with the upper
boundary indicating a bullish outcome. We see lower highs with a descending upper boundary and higher lows with an ascending lower boundary before
breaking to the upside.
The breakout can be heavy which depends on the time symmetrical triangle has confirmed, the longer we stay in the triangle the stronger the breakout
will be. We will get a minimum target when projecting the first touch of the higher boundary and its equivalent point of the lower boundary to the
point where the triangle broke to the upside. The best way to trade the triangle is after breakout and confirmation of the boundary.
________________________________________________________________________________________________________________________________________
If you like this tutorial feel free to support. I also made an tutorial about broadening wedges which you find when scrolling down on my account.
Will be great to see you there. Have a good day and all the best.
Thank you.
________________________________________________________________________________________________________________________________________
“An investment in knowledge pays the best dividend”
________________________________________________________________________________________________________________________________________
Note
UPDATE: Triangle formations are highly decisive and important formations within the markets these times. Especially with value gems such formations can also mark major turning points from where the volatility reaches an accelerated pace.
Recent symbols on the watchlist that completed major triangle formations with a strong breakout: S&P 500, GOLD, BTCUSD
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