Symmetrical Triangle Pattern: Key to Market Success

15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

The Symmetrical Trading Pattern strategy marks a pivotal approach in technical analysis, offering traders a nuanced lens to interpret market trends and movements.

Trading Strategy Guides Logo Dark Transparent

Before we begin, thanks for visiting Trading Strategy Guides (TSG)! We are so glad you’ve found us. You have discovered the most extensive library of trading content on the internet. Our aim is to provide the best educational content to traders of all stages. In other words, we want to make YOU a consistent and profitable trader.

If you’re a brand new trader, we recommend hopping over to our ultimate beginner’s guide to trading to learn more.

This article delves into the intricacies of triangle pattern trading, a formation characterized by converging trend lines mirroring a standoff between buyers and sellers.

As we unpack the psychology behind this pattern, traders will learn to discern potential breakout points, thereby enhancing their market timing. We’ll also highlight the steps that each trader needs to take to succeed with this trading strategy.

Keep reading to learn more!

The Symmetrical Triangle Trading Strategy: Step by Step Instructions

Symmetrical Triangle Strategy

If you like price geometry, nothing beats the Symmetrical Triangle trading strategy. How about geometry and drawing shapes such as lines and triangles? Well, you’re in for a treat. Our triangle breakout will give you some simple tools to help you become a better trader.

In fact, this strategy was one of the most important factors in getting some of the traders on our team to the level of success that they are at now. It is a funny story because one of our traders accidentally discovered this while working on something completely different.

This goes to show you that anything can happen as long as you stay persistent. He stumbled upon a Forex triangle pattern, and once we realized that it worked in Forex, we came to understand that it worked in every trading market.

One important thing to realize when searching for triangle patterns or when you first begin to use triangle pattern trading is that it doesn’t matter if you use a bullish or breakout triangle. It still is an effective method to trade the market if you have the right system and strategy to make it work and are disciplined enough to follow the rules.

Our team at Trading Strategy Guides is working hard to compile the most comprehensive guide to different chart pattern strategies. To understand the psychology of charts and patterns, feel free to check out our chart pattern trading strategy guide.

This triangle pattern can appear throughout any market, and its popularity is notable with all types of traders who trade in any time frame.

The first thing you need to know about triangles is that they are a form of support and resistance. This volatile pattern includes a wide-ranging market and becomes progressively tighter as the pattern approaches its endpoint.

Moving forward, we will discuss this pattern in greater detail and lay down a few notes about the psychology behind the triangle breakout.

What Is a Symmetrical Triangle Pattern?

In technical analysis, it’s one of the most popular triangle price formations that falls under the category of continuation patterns. However, as the name suggests, it can be traded both ways.

The price action needs to move in a series of lower highs and higher lows to be able to define a triangle. In terms of its characteristics, you need only look for two things:

  • An ascending bottom trendline that goes in the upward direction.
  • A descending top trendline that goes in the downward direction.
Symmetrical Triangle Chart Pattern
Symmetrical triangle pattern 1

It can be drawn simply by connecting the swing high/low with two sloping lines that will converge at some point in the future, making the break inevitable.

You need a minimum of two hits on each trendline to draw the pattern. As long as this criterion is met, it can be defined as a triangle pattern.

Now, remember that the symmetrical triangle is a neutral chart formation and can break in both directions.

Note: When we finally break from the Symmetrical Triangle Pattern, the following move needs to be very violent and fast-moving.

Here is a real example:

Symmetrical Triangle Pattern
Symmetrical triangle pattern 3

The Psychology Behind the Symmetrical Triangle Pattern

Basically, what’s happening here is the buyers and sellers are at a draw with each other.

With no clear trend forming, it will keep squeezing smaller and smaller, following the trend lines.

Triangle Breakout: Buyers Vs. Sellers.
Symmetrical triangle pattern 2

Think of it as a tug-of-war between the buyers and sellers.

As the two lines get closer and closer together, it’s evident that something will have to give. Whoever wins the battle will be who you want to catch a ride with by entering a buy or a sell.

The only real challenge with triangle patterns is identifying the real triangle pattern breakout and having enough confidence to hold the trade until the minimum target has been reached.

Now, let’s see how you can effectively trade with the Price Channel trading strategy and how to make profits from basically using no technical indicator.

How to Use the Symmetrical Triangle Strategy (Buy Rules)

The Symmetrical trading strategy will help you increase your account balance quite rapidly. You simply have to use this step-by-step guide on triangle trading to ensure you’re correctly reading the information from the classical Symmetrical Triangle Geometry Pattern.

Step #1: Noticing Lower Highs and Higher Lows

Identify at least two lower highs and two higher lows and draw a Symmetrical Triangle Pattern by connecting these swing points.

It should be pretty easy to draw this pattern. Just connect at least two higher lows with an ascending trendline.

Repeat the same process with at least two lower highs using a descending trendline.

Noticing Lower Highs And Higher Lows To Draw A Symmetrical Triangle Pattern.
Symmetrical triangle pattern 4

Note: Make sure you extend the triangle lines to the right of the chart until they converge.

Step #2: Check to See If the Prevailing Trend Is Moving Upwards

The pattern works best when used as a continuation pattern. This means that before the Symmetrical Triangle Pattern forms, we need to have a prior trend (bullish).

Moreover, the prevailing trend before the ascending triangle chart pattern can provide a clue about the triangle breakout direction. We encourage you to only trade this in the direction of the prevailing trend for high-probability setups.

Checking If We Have A Bullish Trend.
Symmetrical triangle pattern 5

The Symmetrical Triangle is more bullish if it’s formed within an uptrend.
When this breakout happens, it will attract many other people to the “party.”

So far, so good. Now, we need to define our entry technique, which brings us to the third step of this strategy.

Step #3: Waiting for a Breakout to Enter a Buying Order

Wait for the triangle breakout and BUY only after the breakout candle closes above the descending trendline.

We treat this breakout cautiously, so we wait for price confirmation in the form of the breakout candle closing above the Symmetrical Triangle Pattern.

You will benefit significantly by waiting for the breakout candle to close above the pattern. This will prevent you from taking unnecessary risks, and you’ll avoid many of the false breakouts.

Waiting For A Breakout To Enter A Buying Order.
Symmetrical triangle pattern 6

Often, people will place pending orders above and below the Symmetrical pattern in anticipation of a breakout chart pattern. This is a trap and is one of the reasons the false breakout happens.

We want to avoid that!

Note: The best time to enter any kind of triangle is when the price has broken and closed above the upside trendline in the case of a bullish symmetrical triangle breakout or when the price has broken and closed below the downside trendline in the case of a bearish breakout.

Now, the next logical thing we need to establish for the Price Channel trading strategy is where to take profits.

Step #4: Taking Profits at the Right Time

Make sure to take Profit 1 at the same price distance as the triangle height and take Profit 2 at 2 x triangle height.

The textbook profit target for any type of triangle is the height of the triangle projected in the direction of the breakout from the breakout point.

Now, you might be asking yourself, “What is the triangle height?”

We need to work with the triangle parameters to calculate the triangle pattern height. By measuring the distance between the highest point formed within the Symmetrical Triangle and its lowest point, we obtain the triangle height.

Taking Profits Using The Symmetrical Triangle Trading Strategy.
Symmetrical triangle pattern 7

So, you can obtain the triangle height by simply measuring the price distance from the highest to the lowest price point within the triangle formation.

To measure a profit target from the triangle shape pattern, you simply take the triangle height and project that from the breakout point.

Furthermore, the ascending triangle chart pattern uses multiple entry techniques.

The first take profit comes at the same price distance as the triangle height. Because we have found that there is a higher probability of much bigger movement generated by the breakout more often, we have a second profit target at 2 x triangle height.

Taking Another Profit Using This Method.
Symmetrical triangle pattern 8

The next important thing we need to establish is where to place our protective stop loss.

Step #5: Placing a Protective Stop Loss

Place the protective stop loss below the swing low before the triangle breakout. A common approach is to hide your stop loss just below the last swing low before the breakout. You can also use different stop-loss techniques, such as placing the SL below.

Placing A Protective Stop Loss.
Symmetrical triangle pattern 9

Note: The above was an example of a BUY trade. You can use the same rules, but in reverse, for a SELL trade. In the figure below, you can see an actual BUY trade example using the Price Channel trading strategy.

A Sell Trade Example Using The Symmetrical Triangle Pattern Strategy.
Symmetrical triangle pattern 10

Conclusion

The Symmetrical Triangle trading strategy is one of the most proficient ways to trade consolidations because the triangle pattern generally occurs during ranging periods. Typically, we draw the triangle pattern to highlight these ranging areas.

You can easily capitalize on this simple trading pattern by following our step-by-step guide presented throughout this article.

When trading the Symmetrical Triangle Pattern, it’s worth keeping in mind that sometimes, these chart patterns can simply continue to move sideways and emerge into a consolidating market.

You can also use our website to learn how to install indicators on MetaTrader 4 [MT4].

Thank you for reading!

Please leave a comment below if you have any questions about the Symmetrical Triangle strategy!

Symmetrical Trading Pattern Video

Symmetrical Trading Pattern PDF Download

For an in-depth exploration of the Symmetrical Trading Pattern strategy, readers are invited to download our comprehensive PDF guide.

This resource offers additional insights and detailed explanations, enhancing your understanding and application of this effective trading approach.

The Symmetrical Trading PDF guide is an invaluable tool for both novice and seasoned traders.

Symmetrical Trading Pattern Info-graphic Download

A Step-By-Step Guide Info-Graphic For Using This Strategy.
Fibionacci021

How useful was this post?

Click on a star to rate it!

Average rating 1 / 5. Vote count: 1

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

5 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

  1. Great article very informative. I have used this strategy for the past year and it’s so easy! Cut losses quickly and wait for confirmation candle above the triangle are essential.

  2. Ваш сайт и эти публикации очень ценны для начинающих и давно стремящихся познать сферу трейдинга ! спасибо! это и повторенье – мать ученья и возможность по новому взглянуть на те вещи которые вроде бы и знакомы но замылены. согласитесь что чем больше ты изучил и прошелв тем больше в голове каши и не можешь остановиться в выборе какой -то определенной стратегии .

  3. This web site is really a walk-through for all of the info you wanted about this and didn’t know who to ask. Glimpse here, and you’ll definitely discover it.

Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. No information or opinion contained on this site should be taken as a solicitation or offer to buy or sell any currency, equity or other financial instruments or services. Past performance is no indication or guarantee of future performance.