Thursday, March 6, 2014

Day Trading with Symmetrical Triangle Patterns;

In today's video we take a look at Symmetrical Triangles as both a pattern and a potential trade setup! 

This is a fantastic advanced price action trade setup that we can use on any time frame and any market and it works quite well!

"Symmetrical Triangles" form when the markets are in indecision mode. 

"Symmetrical triangles" can be easily detected when prices make alternate "lower highs" and "higher lows" in upside and downside slopes defining a symmetry. 

"Symmetrical" triangles form when supply and demand are near equal resulting in market indecision. Most triangles result in a clear breakout and breakdown in the direction of the prior trend.


How to Trade Them:
Trades are only initiated at the trend line breakouts of the "Triangle." Enter trades only when "Symmetric triangle" breakouts (or) breakdowns are confirmed by price trading one or two ticks above (or) below the breakout/breakdown bar's high/low. 


Place your Profit Target:
Most "Symmetric triangles" result in 100% of the depth rise/fall of the entire triangle range in the direction of the breakout. Partial trade exit targets are set at 50% of the depth from the trade entry. Protect targets by using trail stops.


Always use a Stop-Loss:
"Symmetric triangle" failures occur when price results in false breakouts. Stop below the first major "swing low" below the trend line for a long setup. Place a "stop" order above the first major swing high from the trend line for a short-setup.


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