Chart pattern on Forex – Symmetrical Triangle Pattern
In this material we will discuss examples of continuation patterns, namely Triangle pattern.
From the name, you can already imagine the shape of this pattern. Yup, this pattern is in the form of a triangle, hence the name triangle pattern. This pattern occurs very often at prices that move sideways and shows the battle between buyers and sellers is equally strong. Therefore, this pattern looks like a cone and forms the tip of a triangle.
There are 3 types of triangle patterns, namely:
- Symmetrical triangle
- Ascending triangle
- Descending triangle
We discuss one by one starting from the symmetrical triangle pattern.
Although the name is a symmetrical triangle, in reality this pattern is not always symmetrical. The symmetrical triangle has a convergent line of support (underline) and resistance (the slope is opposite to one point). To make it easier to understand, you can see the sample illustration below:
From the example above, we can see that this pattern is formed when the market is moving sideways after experiencing a strong bullish condition. Or it can be said to “consolidate”. The example image above shows a symmetrical triangle that is formed in an uptrend.
If we apply it to the price chart, the example of the symmetrical triangle will be as below;
A symmetrical triangle must have at least four reversal points consisting of two high points and two low points.
The way to estimate the right and safe target or take profit is to draw the baseline line from the symmetrical triangle, which is measuring the distance from point A to point 1. For example, the baseline distance is around 50 pips, so you can place take profit around 50 pips.
Another way that can be used to place the take profit point is to draw a line from the lower line and align it with point 1 (the Blue line).
Like other chart pattern patterns, prices are likely to make a pullback. As in the illustration above, it appears that the pullback occurs at point 7 and returns to point 8 above the upper trendline (top line).
If you pay attention again, the top and bottom lines will meet in one point (Z). Market confirmation will be bullish is to pay attention to the point (Z), if the price of the pullback and the distance to the point (Z) can be estimated that the price will move up again.
In the example above you can wait for the price confirmation to break the upper line, while at the end of the downtrend you wait for the price to break the lower line.