Trading Strategy Triangles


Forex Trading Strategy Triangles

Judging by the fact that lately I have weekly published on this website forex forecasts forex analyst week and last week, according to the rules of forex charting, decided nevertheless to publish a description of the basic shapes used in it (although I understand that a lot of questions and Comments do not cause these models, an example — the pattern «Brilliant», but nevertheless know how they are formed and what each of features of graphical models, as well as to then not too many questions arise on the model and its identification in the chart of currency pairs, all have decided to publish today a description of the graphical model or pattern forex «Triangle»).

Triangle - a model that periodically formed on all financial markets and the forex market, including in the event that the price does not «know» which way to move on it, that is, if the market is formed by the battle between bulls and bears. In this triangle — is largely a figure of uncertainty.

To construct a triangle must be at least 4 points (2 for trend line on minimums and 2 for the trend line for the highs).

symmetrical Triangle

Triangles are of several types:

1) The ascending triangle — after the construction of trend lines for the minima and maxima of the triangle, as it were upwards. The upper resistance line for the price usually horizontal or slightly upward. After the breakdown of the triangle, the price usually goes up. But as you can see in the picture below, it is the reverse movement after the breakdown of the bottom line of resistance (eg USDCAD (D1))

The ascending triangle

2) The descending triangle — after the construction of trend lines for the minima and maxima of the triangle, as if he «looks» down. The bottom line of resistance is usually the same horizontal or downward, in the main breakdown of such triangles is down (but we should not forget about exceptions to the rule!)

The descending triangle

3) Symmetrical Triangle — a horizontal triangle. The trend lines in these triangles are directed toward the center. The breakdown usually occurs in the direction of the trend prior to the formation of a triangle.

If you formed a symmetrical triangle, it should be noted that point 3 is usually lower than point 1 and point 4 is located above the two (see example in the figure above — picture of the 1st (top)).

Symmetrical Triangle

4) Expanding triangle — is expanding formation, rather than narrowing, and in this article, we will not consider it …

Opening of the transaction, the installation of stop-loss, take-profits:

1) The entry point is usually considered a trend line break (or better, and closing the candle) in one of the parties, as well the entry point can be pierced retest the trend line of the triangle. And third option - a census of the last high or low extreme of the triangle.

If the break occurs in the first two thirds of the triangle, it is often a very good entry point into the market, if the breakdown occurs in the remaining third of the triangle, we must be careful, because these advances are often a lot of false breakouts triangles !

2) The purpose of exhibiting a take-profit is the distance of the widest part of the triangle, deferred from the breakout point of the triangle.

The second method of determining the goal — is to conduct a parallel line to the opposite line breakdown of the triangle. The result is a parallel channel (although in this case, profit is usually smaller, but the price is basically the line of the channel is almost always meets with resistance.

Profit triangle

3) Accordingly, the stop loss is placed at the opposite boundary of the triangle.
Another important feature of the trading strategies of the triangles are the volumes at the time of formation of the model they are usually reduced, and the increase in the breakdown, but as the volumes in MT4 difficult to track, then focus on them will not be looped.

It should be emphasized that not all of the triangles after the breakdown of their costs reach its goal of take-profit, and there are failures in this to forget about the rules of Money Management, and stop-loss should never be!

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Comments (7) on "Trading Strategy Triangles"

  1. […] line. After the retest, the price rises again up and at the same time we have already formed a symmetrical triangle, hence the sample and closing the candle above one of the lines of the triangle, presumably, will […]

  2. […] these triangles smoothly into the symmetric triangles and the pattern is formed as a result of […]

  3. […] Given that the price at this point is actually traded in a symmetrical triangle, although it is possible and is only a temporary figure and the next week and will be broken and […]

  4. […] is the classic figure of the technical and graphical analysis in particular, is very similar to a symmetrical triangle (that is, the figure is well balanced), but with less time formation, and the trend line, of maxima […]

  5. […] The most significant resistance line shopping is the top line of the triangle, so the breakdown of the day and close above it, will say that moving up most quickly to continue! […]

  6. […] 6) The Brown Line Channel + it is possible the green channel. Priority for sale at the approach to the lines. Just about at this level is the level of 61.8% from the last movement in the triangle + false breakdown of the triangle […]

  7. […] principle, it is not surprising, as the chart pattern formed — a symmetrical triangle […]

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