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, A Traders Favourite Pattern
Symmetrical triangles show no clear tendency to break up or down. Despite the fact 56% of the patterns break out to the upside this is likely due to the fact the market tends to move higher. Around half (44%) of these breakouts are profitable and on average the profit per trade is 0.85% over a period of 9 days.
Specific Setups to Improve Profitability
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.
Symmetrical triangles, that breakout early in the pattern, produce inferior results. A breakout is better if it occurs after the pattern gets past 30% of the way to the point. The length of a symmetrical triangle is important with patterns that are 25 days or less producing better results.
If volume strongly supports a symmetrical triangle breakout then the profitability of the trades improves. For volume to support the breakout, volume when the stock is going up should be 40% greater than volume when the stock is going down.
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. - 23310
Symmetrical Triangles, A Traders Favourite Pattern
Symmetrical triangles show no clear tendency to break up or down. Despite the fact 56% of the patterns break out to the upside this is likely due to the fact the market tends to move higher. Around half (44%) of these breakouts are profitable and on average the profit per trade is 0.85% over a period of 9 days.
Specific Setups to Improve Profitability
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.
Symmetrical triangles, that breakout early in the pattern, produce inferior results. A breakout is better if it occurs after the pattern gets past 30% of the way to the point. The length of a symmetrical triangle is important with patterns that are 25 days or less producing better results.
If volume strongly supports a symmetrical triangle breakout then the profitability of the trades improves. For volume to support the breakout, volume when the stock is going up should be 40% greater than volume when the stock is going down.
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. - 23310
About the Author:
Jeff Cartridge has been trading CFDs since 2002 and created the website LearnCFDs.com Discover Chart Pattern Secrets
posted by Mr. Forex at
1:47 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home