In today's video we take a look at the Inverted Triangle or Megaphone Pattern.
This is a pattern that is rare, but when you find one, back up the truck!
This pattern can make you a HUGE amount of money if traded correctly and it is one of our favorites!
Inverted Triangles, or as we like to call them, Megaphone Patterns, are rare and VERY powerful chart patterns that we use to earn profit each day in our Live Trade Room with SchoolOfTrade.com.
This chart pattern consists of higher-highs and lower-lows on both sides and requires a total of five (5) swings, testing each side two (2) times. We also define the middle of this chart pattern as the ‘mid-line’ which is used for taking profit-targets.
Inverted Triangles & Megaphone patterns are ideal for following the long-term-trend; however, you can also use these patterns for counter-trend trading opportunities as well.
Trading with Inverted Triangles & Megaphone Patterns:
Trading with Inverted Triangles & Megaphone patterns is very easy. We want to follow the long-term-trend, buy the lows, sell the highs, and take profit in the middle as well as the opposite side of the pattern.
Trade the pattern:
· LONG: Buy when the price reverses off the lows of the Inverted Triangle Pattern.
· SHORT: Sell when price reverses off the highs of the Inverter Triangle Pattern.
Place your profit-target:
· LONG: your profit-target is placed at the ‘mid-line’ as well as the opposite side of the pattern, which is at the HIGHS of the megaphone pattern.
· SHORT: your profit-target is placed at the ‘mid-line’ as well as the opposite side of the pattern, which is at the LOWS of the megaphone pattern.
Always use a stop-loss:
· LONG: after you buy the lows, place your stop-loss below the lowest point of that move down.
· SHORT: after you sell the highs, place your stop-loss above the highest point of that move up.
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We use simple patterns like the Inverted Triangles to earn profit every day in our Live Trade Room!
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