Forex Symmetrial Triangles
Symmetrical Triangles:
Symmetrical triangles are very common forex chart patterns. These represent a period of indecision. Symmetrical triangles are usually considered as a continuation of overall trend. A symmetrical triangle should contain at least two lower highs and two higher lows. When you see these higher lows and lower highs and join them a symmetrical triangle takes shape. Triangles represent a battle between buyers & sellers. This means that either buyers or sellers are not pushing the price far enough to make a clear trend.
Symmetrical triangles tend to breakout in the direction of the previous trend.
Check the following picture. It is showing higher lows and lower highs. When joined those lower highs and higher lows it formed a symmetrical triangle.
Trading Entry: Enter the trade when the top trend line or the bottom trend line is broken with a strong candlestick. A strong candlestick means a candlestick which has a large body with relatively small tails or no tails at all. Check the following picture. In the following picture the top trend line is broken with a strong candlestick. It does not have long tails compared to the body of the candlestick. So its a good opportunity to enter a long trade.
If the candlestick has a long tail compared to the body of the candlestick and if the tail and not the body of the candlestick that break the top trend line or the bottom trend line then do not enter the trade. For example check the following picture. In the following picture a symmetrical triangle is shown and the symmetrical triangle top trend line is broken by the tail of the candlestick and not the body of the candlestick. Moreover the candlestick has a long tail compared to the body of the candlestick. So its not a good opportunity to enter the trade.
Take profit and stop loss:
Measure the base of the triangle. The price difference should be the same amount as the breakout.
We measure the base of the triangle by taking the price difference between the highest high and the lowest low once the triangle has started to form. Once breakout occurs enter trade. Set stop inside triangle. Set target (limit) for less than amount of the triangle base. Monitor trade until exit price is achieved. Breakouts from triangles tend to occur very quickly.
Check the following picture. In the following picture the difference between the highest high and the lowest low is 60 pips. So the potential break out will be 60 pips. Once the top trend line is broken by the candlestick, it penetrated 10 pips upwards. So the profit should be 50 more pips. But always use some less number of pips than the actual target. Since in the above example there are 50 pips more for profit put the take profit level 5 pips less than the original that means 45 pips. Set stop loss around 5 to 10 pips below the top trend line with in the triangle.
The following are some of the real time examples of the symmetrical triangles formed on different currency pairs price charts.
EURUSD Hourly Chart Symmetrical Triangle:
NZDUSD four hour chart symmetrical triangle:
USDCAD hourly chart symmetrical triangle:










































