Continuation Patterns | Symmetrical And Flag Triangle
Continuation patterns – the symmetrical and flag triangle, when the market is in an uptrend, it can move sideways for sometimes.
The symmetrical and flag patterns are the continuation pattern.
let’s begin with this symmetrical triangle first, We need an ongoing trend, an uptrend.
Then we need swing highs and swing lows that converge.
if you join these swings you get to sloping lines and that is called a symmetrical triangle. And it looks like a pizza slice or a triangle.
How to trade with the Symmetrical triangle.
When you are going to trade with the Symmetrical Triangle.
First, you have to watch the chart.
If Prices are in consolidation that means the equal highs and the qual lows or ranging prices.
That consolidation is making lower highs and higher lows, and then you have to draw a trendline on them.
You have to identify symmetrical triangle by two potential trendlines
if you do so then Triangle formed by 2 converging trendlines.
The important parameters of the triangle are Apex that is converging.
Base measure the height of the triangle from first high to a first low.
And third width the distance from Apex to first low.
Typically prices bounce four to six times in a symmetrical triangle before breaking up.
But what is important here to note these patterns are time-sensitive.
And breakouts should occur before 75% of the width Otherwise, the Pattern is in-valid.
Once the break up occurred and then profit target may be estimated by projected from the base and the point of breakup.
Stop Loss And Trailing Stop.
Warning! Stop loss and trailing stop must place before the trendlines and that depends on your taking risk and reward ratio.
And keep in mind that you won’t take more than 2% risk on your trade with your capital Investment.
Next Topic is Flag Triangle