Symmetrical Triangle Chart Pattern

A Symmetrical Triangle chart pattern is most often a continuation pattern, meaning the trend immediately prior to the pattern itself will continue after the pattern is completed (in most cases).

After a considerable move, a logical period of profit taking for shorter term traders as well as entry points for new traders and investors who missed the original move cause an up and down-sideways movement on a chart. One way this is represented on a chart is in the form of a Symmetrical Triangle.

The first example below is a Symmetrical Triangle in an uptrend:

Symmetrical Triangle

You'll notice that the price was in an uptrend before the pattern formed, and once the pattern was complete, the uptrend continued. This represenets a continuation pattern as mentioned above.

The next example below is a Symmetrcial Triangle in a downtrend:

Symmetrical Triangle

You'll notice the same thing in this example as the first one, that the trend prior to the pattern itself, continues once the pattern is complete.

There are a couple of characteristics that can help recognize this pattern as it's occurring:

  • It consists of a top downward sloping trend line (the top red line in each example) which contains lower highs as the pattern progresses.
  • It consists of a bottom upward sloping trend line (the bottom red line in each example) which contains higher lows as the pattern progresses.
  • The pattern contains at least 2 points that form these upper and lower sloping trendlines.
  • Volume usually decreases as the pattern progresses and increases at the point of breakout, forming a thrusting action.

Examples of stop loss placements would be just past the red sloping line of the last point of reversal prior to the breakout. In most cases, this would mean something other than the end of a Symmetrical Triangle is occurring, therefore invalidating the reason for entering the trade (if entering based on this particular pattern).

Here are more pages to help with various chart patterns:

Return From "Symmetrical Triangle" To "Stock Chart Patterns"

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