CFD Trading Strategy - Symmetrical Triangles Upside Breakout
The symmetrical triangle can be traded very successfully on the long side entering the trade as the stock breaks out to the upside. The pattern forms when the two boundary lines that contain the price movement converge to a point. The bottom line slopes up toward the top line which slopes down. Both lines have nearly the same slope as each other which is why the pattern is called symmetrical.
Symmetrical Triangles, Unpredictable but Profitable
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.
Improve Your Trades
Surprisingly a break to the upside works better in a falling or consolidating market. By using filters that require the market to be in a consolidation or a down trend you can improve the results. If the sector is consolidating or rising the results also improve. This is more as you would expect.
Symmetrical triangles are sensitive to the length of the pattern with breakouts that occur in less than 25 days, from the start of the pattern, performing the best. While the pattern breakout works best in the range specified, avoid trading patterns that breakout early, in the first 30% of the pattern length.
If the volume is very strong in support of the breakout the results are better. Supportive volume means the volume on the way up is 40% higher than the volume on the way down.
Trading Symmetrical Triangles Can Be Very Profitable
You can improve your trading results by using a series of simple filters that have been outlined here. This select group of symmetrical triangles delivers an average profit of 1.87% in 11 days and is profitable on 55% of the trades. Overall this makes symmetrical triangles attractive 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. - 23167
Symmetrical Triangles, Unpredictable but Profitable
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.
Improve Your Trades
Surprisingly a break to the upside works better in a falling or consolidating market. By using filters that require the market to be in a consolidation or a down trend you can improve the results. If the sector is consolidating or rising the results also improve. This is more as you would expect.
Symmetrical triangles are sensitive to the length of the pattern with breakouts that occur in less than 25 days, from the start of the pattern, performing the best. While the pattern breakout works best in the range specified, avoid trading patterns that breakout early, in the first 30% of the pattern length.
If the volume is very strong in support of the breakout the results are better. Supportive volume means the volume on the way up is 40% higher than the volume on the way down.
Trading Symmetrical Triangles Can Be Very Profitable
You can improve your trading results by using a series of simple filters that have been outlined here. This select group of symmetrical triangles delivers an average profit of 1.87% in 11 days and is profitable on 55% of the trades. Overall this makes symmetrical triangles attractive 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. - 23167
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 @ 3:41 PM
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