THE SYMMETRICAL TRIANGLE IN TRADING

Up or down? It depends.

DEFINITION:

The symmetrical triangle is a pattern where two lines converge. Upper line descending, lower line ascending. The price is getting tighter and tighter in this space. It looks like a battle of the undecided.

Aspects to identify it:

1. Formation: Two lines that converge. One connects descending highs, the other ascending lows.

2. Symmetry: Both lines converge at a similar angle. Not perfect, but close.

3. Consolidation: The price moves in an increasingly narrow range. As if holding its breath.

4. Breakout: At some point, the price breaks out. It decides its path.

5. Objective: After breaking, it usually moves a distance similar to the height of the triangle.

6. Confirmation: Better to wait for a candle to confirm. Don't rush.

7. Stop loss: Protect yourself at the opposite line or at the last significant turn.

These triangles can indicate bullish or bearish continuation. It is not entirely clear until the breakout is seen. The previous direction helps to intuit the outcome, but it is not a guarantee.

The backtesting data for 2025 shows a success rate of 54% for continuing the previous trend. Decent medium. False breakouts are quite common, and it's somewhat frustrating. Some moving averages help confirm the direction.

VISUAL EXAMPLE:

B

/ \

/ \

/ \

A-----/------------C

/

/

/

D

In this representation:

• The brand where it all begins
• B is the first peak
• C where it finally breaks
• D the first valley

The converging lines create that triangular shape. The price debates inside until it decides to break out. Sometimes up, sometimes down. The market has the final word.