Wanchain Symmetrical Triangle. Possible Breakout Incoming!
The symmetrical triangle, which can also be referred to as a coil, usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows
Symmetrical Triangles are continuation of an uptrend. But we have to be careful and if the breaks down from the triangle we should consider selling our position to buy back lower.
- Trend: In order to qualify as a continuation pattern, an established trend should exist. The trend should be at least a few months old and the symmetrical triangle marks a consolidation period before continuing after the breakout.
Reading : We are in uptrend
Four (4) Points: At least 2 points are required to form a trend line and 2 trend lines are required to form a symmetrical triangle
Reading : Check
- Volume: As the symmetrical triangle extends and the trading range contracts, volume should start to diminish. This refers to the quiet before the storm, or the tightening consolidation before the breakout.
Reading : Volume is diminishing
Symmetrical Triangles are continuation of an uptrend. But we have to be careful and if the breaks down from the triangle we should consider selling our position to buy back lower.