Tips for Trading Symmetrical Triangles Long with CFDs
Symmetrical triangles have been very popular with traders over the years trading the chart pattern when it breaks out in either direction. A symmetrical triangle is defined by two lines, one on the upper boundary of the price movement which slopes down and one on the lower side which slopes up. The lines have almost the same angle, hence the name symmetrical.
Symmetrical Triangles, Breakout Unclear
Symmetrical triangles show no clear breakout direction. Just over half (56%) of the patterns break upwards and this is likely due to the upward bias of the markets. The average gain is 0.85% in 9 days with less than half of the breakouts (44%) being profitable.
Refine Your Entries
Unusually symmetrical triangles do not work well when the market is an up trend, but perform better when the market is consolidating or falling. As would be expected, both the sector and the share should be consolidating or in an up trend.
A breakout from a symmetrical triangle should be after the pattern has travelled at least 30% of the length. If it breaks out early in the pattern it will produce smaller profits. In a similar way longer patterns that have a length of 25 days or more produce smaller returns.
Volume is very important with symmetrical triangles ensure that the volume is highly supportive of the breakout with the volume as the share rises 40% or more than volume as the share falls.
Symmetrical Triangles Deliver Strong Profits
Following a series of simple rules to determine which symmetrical triangle to trade can improve results dramatically. By applying these filters symmetrical triangles are profitable on 55% of the trades and return an average of 1.87% per trade in 11 days. This is a very profitable pattern to trade.
Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23212
Symmetrical Triangles, Breakout Unclear
Symmetrical triangles show no clear breakout direction. Just over half (56%) of the patterns break upwards and this is likely due to the upward bias of the markets. The average gain is 0.85% in 9 days with less than half of the breakouts (44%) being profitable.
Refine Your Entries
Unusually symmetrical triangles do not work well when the market is an up trend, but perform better when the market is consolidating or falling. As would be expected, both the sector and the share should be consolidating or in an up trend.
A breakout from a symmetrical triangle should be after the pattern has travelled at least 30% of the length. If it breaks out early in the pattern it will produce smaller profits. In a similar way longer patterns that have a length of 25 days or more produce smaller returns.
Volume is very important with symmetrical triangles ensure that the volume is highly supportive of the breakout with the volume as the share rises 40% or more than volume as the share falls.
Symmetrical Triangles Deliver Strong Profits
Following a series of simple rules to determine which symmetrical triangle to trade can improve results dramatically. By applying these filters symmetrical triangles are profitable on 55% of the trades and return an average of 1.87% per trade in 11 days. This is a very profitable pattern to trade.
Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23212
About the Author:
Jeff Cartridge has been trading chart patterns since 1998 and created the website LearnCFDs.com A Simple Timeless Method for Huge Gains
posted by X - Men @ 3:56 AM
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