Continuous Forex Chart Pattern: Symmetric Triangle
The symmetrical triangle pattern (symmetric triangle) is a chart pattern that can appear in uptrend or downtrend. Also marked by a series of lower lows and lower highs. If the support trend line combining the low level in a row and the resistance trend line combining the consecutive high level is drawn, resulting in the two trend lines meeting with the symmetrical position. This symmetric triangle pattern shows a period of doubt when buyer and seller powers in the market are almost identical. During this condition, efforts to push prices up will be immediately rewarded with sales and efforts to push down prices will be directly rewarded with the purchase. There is also a trend of volume down at the time of formation of this pattern. But eventually the price will come out of the triangle area. Usually this breakout will be accompanied by an increased volume, and also towards the previous trend. Practitioner Elliott Wave also sees symmetric triangle as part of a correction that interrupts a larger (major) trend, although symmetric triangles can also be part of complex correction.
In reading the graph with the symmetric triangle continuous pattern, a strong entry signal is given when the price breaks through the triangle toward the previous trend between 50-75% inside the triangle. In other words, if the trend that precedes the symmetric triangle is the uptrend, the price should be zipped up, and vice versa for the downtrend. If the price falls in the opposite direction, then the signals are considered less valid. However, the breakout motion that occurs between 50-75% in the symmetric triangle pattern is often more reliable. While the breakout at the beginning or end is more vulnerable to failure. Thus, if the price breakout before 50% or after 75% of the triangle area, then it is not considered a valid sign in signal because the break out movement has a higher tendency to fail.
The price projection of the symmetric triangle pattern can be calculated by taking the widest part of the triangle and adding it to or decreasing it from, the breakout level, depending on the direction of the existing trend. Alternatively, the trend line can be drawn parallel to the trend line corresponding to the breakout, with the extension being the target price for the next price movement.