Last week I demonstrated how to use basic technical analysis patterns to help you learn to apply the Descending and the Ascending Triangle chart pattern. Over the weekend, I received several emails asking me for more tutorials on simple chart patterns and how to identify the correct market conditions for using these chart patterns.

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I figured I would show a quick demonstration that answers these questions and teach you another trading pattern at the same time. The Symmetrical Triangle is a chart pattern that is recognized by the distinct shape created by two converging trend-lines. The pattern is identified by drawing two trend-lines that connect a series of sequentially lower peaks and a series of sequentially higher troughs. Both trend-lines act as support and resistance levels that prevent the price from heading higher or lower, but once the price breaks either of these levels, a volatile directional move often follows.

The Symmetrical Triangle is generally regarded as a period of consolidation before the price moves beyond the support or resistance trend-lines. A break below the support trend-line is used to signal a price break to the downside, while a break above the resistance trend-line signals a breakout to the upside. This is where most traders get into big trouble, knowing under what market conditions to use this pattern for best results.

Most trading books will tell you to that the Symmetrical Triangle is a continuation pattern; this means that you should take trades in the direction of the trend after a strong move is already under way. This is how I utilize both the ascending and descending triangles as well as the symmetrical triangle.

The best time to trade symmetrical triangles is after the stock or other market you are trading has developed a trend towards a particular direction. You should then only take symmetrical triangle breakouts in the direction of that trend.

Notice in this particular example how the stock topped out after a strong up trend and is beginning to come down slowly. This is the perfect opportunity to trade breakouts to the downside or breakdowns as they are called.

In this example the stock bottoms forex seminar converter currency exchange foreign rate after a strong tradersway binary options and begins to trend up again.

You can tell by looking at the chart that the uptrend is mature and the stock already clearly reversed direction. This is the type of trading environment you want to see prior to trading Symmetrical Triangle patterns. This is what stock chart buy pattern recognition proper technical analysis pattern should look like.

You should avoid taking trades if you cannot tell which way the market is headed prior to the formation of this pattern. Here is another example of how a breakout from a Symmetrical Triangle should look like.

The Symmetrical Triangle is one of the most traded patterns and works great when you follow simple rules. Remember to use the pattern for continuations as opposed to reversals. Also, keep in mind that the pattern can take anywhere from 2 months to two weeks to set up correctly. The longer the pattern sets up the better the odds of a strong move in one direction.

Lastly, the pattern can be applied to stocks, futures, commodities and currencies.

5 Great Stock Chart Patterns Every Investor Should Know - umisifuy.web.fc2.com

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Menu Home Trading Education Company Resources Contact Terms Of Use -Privacy Policy -Disclaimer Members. Don't Miss Swing Trading Stocks Strategies Swing Trading Stock Ideas — Screening Stocks Retracement Entry Methods Anyone Can Learn Swing Trading Tips For Beginners Swing Trading Methods — Descending Triangle Analysis Short Swing Trading — Selling Short Has Advantages Swing Trading Guru. Both Trend-lines are Symmetrical. Example of Breakout To The Upside. Stock Topped Out and Begins To Move Downwards.

The Uptrend Is Well Under Way In This Example. The Pattern Can Take Anywhere From 2 Months To 2 Weeks To Complete. The Downtrend Was Developed Prior To Triangle Formation.

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Posted June 18, 0. Posted June 17, 0. Posted June 16, 0. Posted June 15, 0. Posted June 14, 0. Posted June 13, 0. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND FOREX MARKETS. DON'T TRADE WITH MONEY YOU CAN'T AFFORD TO LOSE. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.

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