Symmetrical triangle. Symmetrical triangles Asymmetrical triangle

John J. Murphy gives one of the clearest definitions of the characteristics of this technical analysis pattern:

“The minimum requirement for each triangle is to have four anchor points. To draw a trend line, as we remember, two points are always needed. Thus, to draw two converging trend lines, each of them must pass through at least two points."

As shown in Fig. 1, the “triangle” begins at point 1, that is, where a consolidation of an upward trend is formed. Prices decline to point 2 and then rise to point 3. However, point 3 is located below point 1. The upper trend line can only be drawn after prices fall from point 3.

Consecutive dots on the top line are declining, on the bottom, point 4 is above point 2, and point 6 is above point 4. According to Murphy, only when the price rises above point 4, and the trader has the opportunity to draw two converging technical levels, can he assume that a symmetrical “triangle” is being formed.

The model ends when the price goes beyond one of the levels - upper or lower.

Fig.1. Reference points of a symmetrical “triangle”

The vertical line to the left, drawn from point 1, is considered the base of the figure. And the point where the support and resistance levels intersect is the top.

Symmetrical triangle false signals

John J. Murphy it just states the frequently encountered fact of a false breakout of a symmetrical “triangle”. However, he admits that he cannot:

• explain the cause and nature of these false breakouts;
• find a filter that would filter out false ones and record true breakouts of the levels of the symmetrical “triangle”.

Thus, John J. Murphy wrote:

“For some reason that is difficult to explain, bullish triangles sometimes give a false bearish signal before the uptrend resumes. It usually appears during the fifth and final leg of the triangle. The signal often occurs near the top of the pattern and means that the trend has moved too far to the right.”

Two techniques for measuring a symmetrical "triangle" by John J. Murphy

To measure this figure Murphy suggests using two methods.

He describes the first as follows: “The easiest way is to first measure the height of the widest part of the pattern (the bottom) and plot this distance vertically either from the breakout point or from the top.”

The second method is to project a trend line from the top of the bottom (point A) parallel to the lower trend line. This upper channel line becomes the upper guideline in an uptrend. Since the direction of a new segment of rising prices tends to repeat the angle of the previous upward segment of the trend (fixed before the triangle was formed), it is possible to establish an approximate time reference for the price approaching the upper boundary of the channel, as well as the price reference itself.

As shown in Fig. 3, the break of the lower line in October 1983 signaled the emergence of a major downward trend. Notice another small symmetrical “triangle” located between coordinates 7.00 and 8.00 on the chart. It indicates a continuation of the bearish trend.

Cornelius Luca on the symmetrical “triangle”

Cornelius Luke notes that “triangles” are very similar to “pennants”, only they do not have a “pole”. Such figures are more common on charts, since their formation requires a smaller price movement. On the other hand, “triangles” have closer price targets.

Like other classics of technical analysis, Cornelius Luca admits that:

• “triangle” models can be divided into four types (symmetrical, ascending, descending and expanding);
• you can build a symmetrical “triangle” using at least four points (two for the resistance line, two for support);
• the price target for this pattern can be determined in two ways (by projection from the base or from the breakout line);
• a breakthrough of the triangle levels can occur in any direction.

Cornelius Luke states:

“As we approach the top of the triangle, the trading volume noticeably decreases, which indicates either the duality of the situation or a temporary equilibrium between supply and demand. The breakout must be accompanied by an increase in volume."

From what is shown in Fig. 4 examples show that the width of the base of the bullish triangle is 400 pips (the difference between 94.00 and 90.00). Since the breakout point is at 92.40, we move 400 pips up from it and get the result - 96.40. This is where the price should go if the breakout turns out to be true.

Calculations for the bearish symmetrical “triangle” (Fig. 5) are carried out in exactly the same way, only the price is postponed not up, but down.

Alexander Elder on “triangles”

U Alexandra Eldera We find six important additions to John J. Murphy's postulates about these figures of technical analysis. In particular, A. Elder:

Alexander Elder's trading rules when a triangle appears

Alexander Elder does not recommend trading inside the triangle. Especially if the figure is not very large. As the pattern ages, the amplitude of fluctuations becomes smaller, the profit also decreases, but you need to pay the same amount of commissions. And yet Elder does not exclude the possibility of “playing” inside the “triangle”, expecting, of course, a breakthrough. At the same time, he advises adhering to several rules:

• When working inside the triangle, use oscillators such as stochastics and Elder beams to help pick up small fluctuations.
• When trying to figure out whether a breakout will occur up or down on the daily chart, look at the weekly chart. If there is an upward trend, there is a high probability that the pattern will break out upward and vice versa.
• If you intend to buy on an upward breakout, place a pending buy order above the upper border of the triangle, and lower it as the pattern narrows. In the opposite direction - a sell order below the support line, which is gradually moved higher. Once the pending order is triggered, set a stop loss inside the triangle. Theoretically, the price can still return to technical levels, but only with a false breakout will it go deep inside.
• If there is a pullback after the breakout, watch the volume. A pullback with high volume threatens a change in direction. When volumes are low, you can double your position by taking another trade in the direction of the breakout.
• If the price approaches the last third of the triangle, it is better to cancel your pending order. The situation is such that it is almost impossible to predict further price behavior.

D. Schwager on symmetrical “triangles”

D. Schwage considers a symmetrical “triangle” as a trend CONTINUATION figure.

In his book “Technical Analysis. Full course" (see MasterForex-V Trading Academy Library) he writes:

“A symmetrical triangle usually ends up as a continuation of the trend that preceded it.”

To support this, D. Schwager provides several examples on charts of real trading.

L. Borsellino on symmetrical “triangles”

L. Borsellino in the “Trading Problem Book” (see Library of the MasterForex-V Trading Academy) to determine the direction of a triangle breakout, it uses the intersection of three signals (indicators):

• trend lines on the “triangle”;
• moving averages;
• oscillator.

L. Borsellino wrote:

“By using three indicators—trend lines, moving averages, and oscillators—you have three “opinions” about the tone and direction of the market. At some time or at some price level they may not coincide. Some signals will arrive too early, some will arrive too late. But when there is consensus among your indicators, you have confirmation that can produce a low-risk, high-probability trade.”

Explaining the nature of the symmetrical “triangle,” L. Borsellino compares its narrowing range boundaries with a spring that gradually “compresses” and then straightens under the influence of accumulated energy. Therefore, breaking through technical levels always occurs with growing trading volumes.

Borsellino advises connecting all the vertices and all the bases with lines. Then the “triangle” model and the point of intersection of technical levels will be determined more accurately. According to Borsellino, the breakout of these patterns most often occurs three-quarters from the base of the triangle to its apex. And it occurs “in the direction of its supposed peak.” Once broken, the moving average helps confirm that the price is back on trend.

Eric Nyman's entry points on the symmetrical triangle model

According to Eric Nyman, after passing point “A” (see Fig. 12), which is located at the level of the previous peak inside the figure, the signal for making a transaction can be considered strong (+++).

At point “A”, therefore, a good position is for selling after a breakout of the lower border or buying after a breakout of the upper one.

Unsolved problems of true triangle penetration in the works of the classics of Forex technical analysis

In Fig. 13 shows a typical mistake of the Forex classics. It turns out that breaking through the “triangle” along the trend does NOT ALWAYS lead to the resumption of movement in the previous direction. Accordingly, opening a sell transaction when the SLANT lower side is broken out can lead to losses.

The nature of this error is very prosaic. To confirm their conclusions, analysts selected from the trading history exactly those that indicated they were right. But the criteria for true and false penetration were not taken into account.

Try to find the point of actual resistance breakdown on the next chart yourself, from which the price began to rise.

MasterForex-V Trading Academy questions:

Let's consider how a true “triangle” is broken through the stages of analysis proposed in the materials of the closed forum of the MasterForex-V Trading Academy.

One of the fairly common patterns that can be found on the chart is the Triangle figure. This pattern is formed when uncertainty appears in the market.

For example, some important news is expected that could change the trend. In this case, volatility gradually narrows and thus the edges of a triangle are formed.

Triangle patterns in technical analysis

There are three types of triangle patterns in technical analysis:

• symmetrical (or equilateral);
• ascending;
• descending.

In technical analysis, this is the figure with the greatest degree of uncertainty. The symmetrical triangle represents the balance of balance between buyers and sellers. The support line and the resistance line are drawn along three minimums and three maximums. The probability of a breakthrough towards the dominant trend in a symmetrical triangle is much higher than a reversal, so working out positions in the opposite direction of the trend is highly not recommended.

For fans, symmetrical triangles are one of the best forecasting tools. This formation works very well together with the wave method. The trader does not know in advance and cannot even imagine where the price may go after this.

Let's look at the screenshot. Inside any triangle there are several waves with vertices, which form its edges. The price movements shown in the figure are conditional, since it has been repeatedly proven that after an equilateral triangle, the price can go in any direction. The most important thing is to wait for one of the edges to actually break through. This is what you should focus on when opening a deal.

Trading inside the Triangle pattern is not recommended. This can lead to losses, since the formation is constantly narrowing, and the trader does not know in which direction the breakthrough will take place. At the moment of the breakthrough, you should open a trade in its direction. That is, if, for example, the upper line is broken, it is recommended to enter a long position. If the lower line breaks through, the entry is made into a short position.

Descending Triangles technical analysis gives the trader more information about the market. At the very least, he can assume that the incoming signal will provide an opportunity to open a short position. Such models appear in a market in which buyers are gradually losing power, and sellers, on the contrary, are gaining it. At the moment the lower boundaries of such a triangle are broken, sellers finally gain superiority. This is usually accompanied by fairly strong market momentum.

The figure is characterized by at least three maximums, each of which is lower than the previous one, and at least three minimums located at the same level. The support line forms a flat line and, when broken, in most cases becomes a resistance level.

Ascending Triangle, on the contrary, hints that the “bulls” may be stronger in this situation. Buyers are gradually gaining strength, the lows are no longer updated, but sellers still do not allow the price to rise above the upper horizontal edge of the triangle. At the moment the signal appears, this line breaks through and the price goes higher. Usually, such a situation is accompanied by a strong impulse.

Divergent triangle- This is a type of symmetrical. Its top is directed to the left, and the price moves along the edges with a gradual expansion of volatility. This pattern rarely involves serious impulses. You can even trade within the model, as volatility gradually increases.

The divergent triangle is one of the most difficult triangle shapes to practice.

Each new minimum or maximum forms a new price extreme. Unlike all the described models, the tip of the triangle is located not at the end, but at the beginning of the formation. In classical technical analysis, an expanding triangle is a trend continuation figure. In most cases, a breakdown of the support or resistance line carried out at three extreme points becomes a continuation of the trend, but it is very difficult to identify the truth of the breakdown. Obviously, due to the complexity of working with him, many training courses exclude this figure from their programs.

• To work with the expanding triangle, in order to have the most complete understanding of the effective use of the pattern, it is worth studying the trading method called. This swing trading method allows you to work inside a triangle with minimal risk. If we add work with going beyond the boundaries of the configuration to Wolfe’s methods, then the expanding triangle can work as a separate trading system.

If you find an error, please highlight a piece of text and click Ctrl+Enter.

Variations of this basic figure can be either a signal of continuation of the current trend or the beginning of a corrective movement. The classic Forex Triangle strategy counts on the appearance of a strong trading signal at the breakdown of the figure’s boundaries and further price movement, at least to the height of the triangle’s base.

Formation and development of the Forex Triangle pattern

The pattern is a graphical figure of two lines built along a number of local extrema - at least 2-3 in each direction. The sides of the Forex Triangle represent support/resistance lines and must have a point of mutual intersection, actual or calculated. For an expanding triangle, the point of intersection of the sides is to the left of the price (in the “past”), for all other models - to the right of the current price (in the “future”).

The classification of triangles is based on their direction: looking down - descending, going up - ascending, if the slope of the sides is almost the same - symmetrical or divergent triangle.

The key condition for opening positions is the fact of the breakdown of the upper or lower border. Let's consider the symmetrical Forex Triangle as an example for forming and working out a model.

When a Forex symmetrical Triangle pattern is formed, the fading amplitude of price fluctuations can lead to a breakout in any direction: both down and up. This triangle is a common sequence of trend areas and flat periods, and therefore appears on the market most often. The model is considered neutral (uncertain), which means you can place two pending orders - above the upper border of Buy Stop, below the lower border - Sell Stop, and then adjust when the border itself changes.

Target for possible breakthrough:

• or a distance equal to the height of the widest part of the pattern, set aside from the calculated breakout point;
• or two additional lines: through the upper point of the base - parallel to the support line (for an upward breakout), through the lower point of the base - parallel to the resistance line (for a downward breakdown).

Statistics show that the pattern is more likely to be broken and worked out in the direction of the initial trend.

In terms of profits we can offer:

• some fixed size (according to money management);
• take profit on a line parallel to the unbroken border of the figure (support/resistance);
• according to the highest local maximum of the entire model (when resistance is broken), or according to the lowest minimum of the model - when the support line is broken.

Case Study

The first signal will be a breakdown of the upper or lower border of the pattern, then we wait for at least one retest (i.e. a rollback of the price to the same border, but on the other side), and only after that it will be possible to place pending buy/sell orders at max/min of the test fractal. We place a stop either behind the nearest significant fractal, or according to the diagram above. You can use trailing: either with a fixed step, or move the stop according to indicator readings (for example, according to key ATR points). After one of the pending orders is triggered, it is recommended to delete the second one.

And this is what actually comes out of the Forex Isosceles Triangle figure. A clear pattern was visible; there was a breakdown of the upper border and a retest of the border from top to bottom. After this, a pending Buy Stop order was placed, which as a result did not work, i.e. the breakdown of the upper boundary turned out to be false. The price turned around, broke through the lower border, made a rollback and went down again. The Sell Stop delay set below the test min worked successfully. The initial Stop Loss was set above the last local max.

Forex Ascending Triangle

The pattern (ascending Triangle) is also called a growing or Forex Bullish Triangle. Its appearance means that there is already a bullish trend in the market, at which sellers managed to form a local resistance level, and for some time buyers fail to overcome it. After the breakout, the overall bullish trend should continue.

The upper boundary is a (roughly) horizontal line (resistance), the lower boundary (support) has an upward slope. As you approach the calculated intersection point, the amplitude of oscillations inside the figure decreases. In most cases, the Ascending Triangle is worked out as a continuation pattern of a bullish trend, but the strength of the signal depends on the direction of entry into the pattern and the direction of the breakout.

How to trade? Statistics show that after the formation of a model, the price most often breaks through the upper limit, so a Buy Stop is usually placed behind it.

When the market enters a bottom-up pattern (bullish trend) and breaks through the horizontal border upward, the signal is considered the strongest. If the price enters the pattern from top to bottom (bearish trend), but later still breaks through the upper border, the bullish signal is considered weak. If the Forex Ascending Triangle figure has formed on a downward trend, then after the price enters from top to bottom and breaks through the inclined border (downwards), a bearish breakout will be most likely. We receive an average sell signal.

Descending Triangle Forex

The pattern (descending Triangle) is also called a falling or bearish triangle. The figure means that there is a bearish trend in the market, in which buyers are trying to maintain a local support level, and sellers cannot get past it for some time. After the breakout, the global downward trend continues.

The lower border is (to a first approximation) a horizontal line (support), the upper border (resistance) has a downward slope. As you approach the intersection point, the amplitude of oscillations within the figure decreases. In most cases, the Descending Triangle is worked as a continuation figure of a downward trend, but the strength of the signal depends on the directions of entry into the figure and the breakdown.

How to trade? Statistics show that after the formation of a descending triangle, the price most often breaks through the lower border, which is why a Sell Stop is usually placed behind it.

When the market enters the Forex Descending Triangle pattern from top to bottom (bearish trend) and breaks down the horizontal border, the bearish signal is considered the strongest. If the price enters the figure from bottom to top (bearish trend), but later still breaks the lower border downwards, the bearish signal is considered weak. If a descending triangle has formed on a general bullish trend, then after the price enters from the bottom up and breaks through the upward sloping border, a bullish breakout will be most likely. We receive an average buy signal.

Expanding Forex Triangle

This pattern (expanding Triangle), the inverse of the symmetrical Triangle, appears rarely, but signals a state of prolonged uncertainty when neither bulls nor bears are willing to take risks. The beginning is considered to be movement on low volumes after the end of a strong trend, and then the triangle is formed due to the emergence of new positions and a gradual increase in volumes.

It is difficult to trade on it, because a clear trading signal can only be obtained with a true breakout and consolidation beyond the boundaries of the figure, and the probability of any direction is approximately the same.

To construct a divergent Forex Triangle figure, the sides of the triangle must be located at the same angle to the horizon, and the point of intersection of the lines must be to the left of the price movement. The figure takes a long time to build, so local max/mins that do not reach the boundaries are possible within the zone.

A breakdown of the boundaries occurs at the end of the strongest impulse, that is, frequent “false” breakdowns are possible. Strong news or the opening of a trading session when the price approaches the border may well break this pattern. In the event of an unsuccessful breakout of the boundaries, a return to the zone and a gradual decrease in amplitude, such triangles can smoothly transform into symmetrical ones and, as a result, form a strong “Diamond” reversal pattern.

How to trade? If the diverging triangle as a Forex figure is not too large, then it is better to wait it out - let the market not decide on the direction. If the pattern is formed with a large scope, then you can trade inside the triangle according to the usual rules of graphical analysis, using border retests as a rollback to one side, at least to the middle line of the pattern. We move the Sell Stop/Buy Stop at some distance from the support/resistance lines; it is also recommended to combine the target levels with the Fibonacci level from the last movement.

Additional rules for working with Forex Triangles

1. For a normal signal, the price breakout should be in the direction of the main trend, and at a distance of 1/2 to 3/4 of the horizontal length of the figure. If the price cannot move out of the “space” between these points, then the pattern is considered weak. Then exit from the pattern is most likely and further movement becomes uncertain.
2. According to classical technical analysis, the Forex Triangle pattern must have at least 5 waves, or at least there must be an odd number of them.
3. To avoid entering on a false breakout, you need to wait until the breakout candle closes. If the candle closes outside the border, then you can enter in the direction of the breakout, if inside the triangle, then the breakout can be considered false.
4. The fastest exit from the Forex Triangle occurs when the last wave unfolds inside the figure without touching the boundaries.
5. Keep an eye on volumes (at least tick volumes). As the Forex Triangle pattern moves, the total trading volume should decrease, and during a breakout it should increase sharply. If, after a breakout, the borders of the triangle “return”, then in order for the new model to be successfully worked out, this “return” must take place on a falling volume.

The Forex Triangle figure appears more often than any other figure precisely because it symbolizes the most common state of uncertainty in the market, or the struggle between buying and selling. Understanding how to work with triangles is mandatory when working with any asset and in any trading conditions.

Have you ever taken a trade based on ascending, descending or symmetrical triangles and lost due to a trend reversal? Below we will look at how often the triangle model does not work, and we will try to understand the reasons for the appearance of false trading signals.

Graphic models are like children: some behave better, others behave worse. Triangles - ascending, descending and symmetrical - are very attractive for trading, since their shape may indicate the direction of the breakdown. But trading them successfully is very difficult. Let's look at them in order. Let's start with ascending triangles.

Ascending Triangles

In Figure 1 you can see an example of an ascending triangle (in red) on . The price hits and bounces several times, forming a flat top. The line drawn through the vertices is approximately horizontal.

Picture 1

At the same time, the depressions are rising. This means that the trend line connecting the troughs has an upward slope. Local tops touch the top line several times (at points 1-3), and local lows touch the bottom line (at points 4-7). You need to make sure that the price touches each trend line at least twice, and preferably 3 times or more. The two intersect at the vertex of the triangle.

For all triangles, the price must cross its area, bouncing from the upper border to the lower one and filling the free space with its movement. Do not mistake part of a rounded triangle for a triangle trend reversal . The top left inset in Figure 1 shows an example of such an error. Taking part of a rounding reversal (the price line in black) and representing it as an ascending or descending triangle (for convex reversals) is a common mistake.

With an ascending triangle, volume tends to decrease (blue line). It can be quite low 1-2 days before the triangle breaks out. But this is not always the case, for example in this case.

In ascending triangles, I like that the sloping trend line indicates the direction of the breakout - up (theoretically). Prices are like a sprinter at a low start, who gathers his strength while waiting for the starting pistol to fire, and then rushes forward powerfully, often with even more enthusiasm than in the picture presented. According to the latest studies that were conducted on this model, an upward breakout occurs in 64% of cases.

Look at the blue inset at the bottom right of Figure 1. Can you spot the ascending triangle pattern in this piece? It takes a trained eye to spot triangles. However, this applies to any price model. Once you know what to look for and practice finding triangles, finding them becomes easy.

Are there any difficulties in trading ascending triangles?

What problems arise with ascending triangles? Look at Figure 2 (daily time frame). Price touches each trend line several times, forming a flat top and rising bottom. Volumes are behaving as expected and appear favorable. A breakdown of this triangle occurs downwards when the price first closes outside the trend line (A), giving rise to shorts. But then the price quickly reverses and rises to point B, then reverses again and falls to point C.

Figure 2

If you were trading this pattern, the lack of a sustainable trend would likely throw you out of the position at a loss. How often do these failed ascending triangles occur? For a downside breakout, a failed pattern is one in which the price falls below 10% before reversing and closing above the highest peak of the chart pattern. In the case of an upward breakout, the price rises by less than 10% before reversing and crossing the entire triangle to close below its bottom (under the lowest price in this pattern).

For breakouts to the upside, my sample of 925 ascending triangles in bull markets failed 26% of the time. The results of downward breakouts turned out to be worse. Of the 463 rising triangles I looked at, the chart pattern failed 40% of the time.

Descending Triangles

By inverting the ascending triangle, you get a descending triangle pattern. Consider Figure 3. The Descending Triangle (A) has a flat bottom as price bounces off this support line several times. The upper trend line has a downward slope, which suggests a breakdown downwards and a weakening of the bulls' position. A breakout downward is the most likely, but not guaranteed, scenario.

Figure 3

This descending triangle breaks down at point A. But the price, without falling far, turns around and, having risen above the upper border of the triangle, closes at point B, above the highest price in this triangle. It was a failed attempt to break down.

Symmetrical triangles

The effectiveness of the symmetrical triangle pattern seems to combine all the disadvantages of the ascending and descending triangles. Figure 4 shows such an example.

Figure 4

In the case of a symmetrical triangle, the price fluctuates between two converging trend lines. It touches each of the lines at least twice, and preferably 3 times or more, forming this graphical model. This pattern is sometimes called a spiral because the price twists tighter and tighter until it breaks out on one side or the other.

In this example, the breakout occurs downward at point A when the price closes outside the lower trend line. Then it turns around and rushes beyond the boundaries of the upper trend line. Since the price does not close above point C, the highest value in this pattern, such a breakout cannot be considered a failure. But trader shorting the stock would have incurred a loss after the price rose above point A and went skyward.

As mentioned above, such symmetrical triangles combine the worst features of ascending and descending triangles. Failed downward breakouts occur most often of all the studied graphical patterns - in 42% of cases. That is, in almost half of all transactions. Breakouts to the upside also show the worst failure rate of all triangles at 27%.

Triangle Trading Performance Statistics

Figure 5 shows performance statistics for these three types of triangles. Symmetrical triangles fail most often, both on breakouts up (27%) and downwards (42%). Descending triangles fail less often than others.

Figure 5

Why is it important? If the symmetrical triangle does not work in 27% of cases during an upward breakout, this means that the price, by definition, will rise by at least 10% in 73% of cases. While this sounds attractive, let's compare it to another charting model - . Breakouts up for it are unsuccessful in only 12% of cases. This means that the price in 88% of cases rises by at least 10%. Maybe. you'll want to switch from triangles to more robust patterns, such as head and shoulders. But triangles can still be successfully traded.

And here's how you can do it. Failed chart patterns need to be learned through trading them and analyzing the results. You will be able to understand the ascendant quickly. Then you switched to descending triangles. In this case, you can look for failed downward breakouts (the price breaks the triangle down, reverses and then closes above the highest price in a given graphical model), and after detecting such situations, enter a position. The move up after a failed triangle can be powerful, even though the position is entered late (above the highest price of the triangle, not after a close above the upper trend line).

Let's look at the right side of Figure 5. Here are the performance statistics. For failed breakouts to the upside, the numbers show the distance from the lowest price in this pattern to the lowest low before the price rises at least 20% (trend change). You buy the stock on the day the price closes below the triangle and sell at the lowest low before the price reverses. This is perfect. Since these numbers take into account hundreds of ideal trades, you should not expect your trade to perform the same. It may turn out better or worse. These figures are provided for comparison purposes only.

The right column, for downside breakouts, shows the average price increase after the triangle can be considered a failure. These figures are also averages over several hundred ideal trades. They reflect the distance from the highest price in a given model to the highest high, i.e. to the peak before the price fell by at least 20% (trend change).

The effectiveness of the failed downward breakout descending triangle pattern is significantly superior to the other two triangles. This is why they are worth trading. The problem with triangles is that they often do not work in the direction of the original breakout. If this happens, opening a trade in a new direction may be more profitable, because the main thing in trading is to make money.

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A real example of a symmetrical triangle is shown in Figure 5.27.

The most reliable breakouts occur between approximately half and three quarters of the distance from the beginning of the triangle to its end (apex). In the case of a symmetrical triangle, there is usually little to indicate the direction of the breakout. If prices pass inside the triangle all the way to the top, then a breakout may not occur at all.

This figure differs from the previous ones in that the triangle is usually a continuation figure. Its formation signals that the trend has gotten ahead of itself (slang - Author's note) and should consolidate for some time. After this consolidation is completed, the trend usually resumes moving in the same direction. Therefore, in an uptrend, a triangle is usually a bullish pattern. In a downtrend, the triangle is usually bearish. The triangle figure can take many different forms. The most common is a symmetrical triangle (see Fig. 10). This pattern is characterized by a horizontal movement on the chart, where the price action gradually narrows. Trend lines drawn along its peaks and troughs begin to converge. Each trend line usually experiences two or (more often) three touches. Typically, between two-thirds and three-quarters of the way through the pattern, prices break out in the direction of the previous trend. If the previous trend was up, prices will likely break out.

When rapid price movement breaks out of a symmetrical triangle, the breakout point often marks the middle of the established trend. Others

The symmetrical triangle in Fig. 26 turned out to be a reversal figure, the key maximum was recorded in wheat futures.

The main varieties of these models are shown in Fig. ba-v. A symmetrical triangle (see Fig. 6.1 a) consists of two converging trend lines, where the upper line falls and the lower rises.

Rice. 6.1 a Example of a bullish symmetrical triangle. Notice the two converging lines. The pattern ends when the market records a closing price outside of either of the two trend lines. The vertical line on the left is the base of the model, and the point on the right where the two lines meet is the top.

A symmetrical triangle or “spiral” is usually a trend continuation pattern. It marks a pause in an already existing trend, after which the latter resumes. For example, in Fig. 6.1 and the previous trend was upward, and after the consolidation of prices in the form of a triangle, prices will most likely continue to rise. In the case of a downward trend, a symmetrical triangle would mean that after its completion, prices would resume falling.

Please note that point 4 is located above point 2. The lower ascending line can only be drawn after prices rise from point 4 as the market recovers. Only from this moment does the analyst begin to suspect that there is a symmetrical triangle in front of him. Now we have four reference points (1,2, 3, 4) and two converging trend lines.

There are special methods for measuring triangles. So, when working with a symmetrical triangle, two methods are used. It's easiest to first measure the height of the widest part of the shape (the base) and set that aside. vertical distance from either the breakout point or the top. In Fig. 6.2a is an example of the projection of this distance from the breakout point. This is the method I personally prefer.

Fig.6.2a There are two ways to measure a symmetrical triangle. One is to measure the height of the base (A-B) and project this distance vertically from the breakout point C or from the top. Another method is to project upward a line parallel to the bottom line of the model from the top of the base (point A).	100%" border="0">
Rice. 6.26 From the end of July to the end of November dynamics the SRV futures price index (lower line) formed a bearish symmetrical triangle. If you measure the height of the triangle and project it down, you can see that the lower price target (242) has been reached.	100%" border="0">

RICE. b.ba An example of a diamond. This is a trend reversal pattern that forms at the top of the market. At first it resembles an expanding, then symmetrical triangle. The pattern ends when the lower, upward trend line is crossed. Measure the height of the model at its widest part, and then project that distance down from the intersection point.

The pennant has a shape similar to a small horizontal symmetrical triangle.

As a rule, such a pattern manages to travel two-thirds of the distance to its top before breaking out, and sometimes even reaches it (the ability to go all the way to the top also distinguishes it from a symmetrical triangle). As the wedge forms, the volume should decrease and then, upon breakthrough, increase. With a downward trend, a wedge forms faster than with an upward trend.

Sometimes the rectangle is called a “trade (market) corridor” or an area of ​​stagnation. In Dow theory terms it is called a "line". Regardless of the name, such a pattern usually marks a period of consolidation in the development of the current trend and usually ends with prices continuing to move in the same direction. In terms of predictive value, a rectangle is basically the same as a symmetrical triangle, with the only difference being that its trend lines are parallel rather than converging.

In a symmetrical triangle, the ratio of each subsequent wave to the previous one is approximately 0.618.