News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • $GBPUSD is consolidating around the 1.3800 - 1.3850 level today, around a nearly one-month low. The pair hit a fresh multi-year high in late February before falling lower amidst a resurgence in USD strength as yields continue higher. $GBP $USD https://t.co/i6g0gEq6jA
  • US 10yr Treasury Yields are consolidating right around the 1.60% level today, trading around their highs of the pandemic. $USD https://t.co/9FrulBqqsC
  • #Gold, #Silver, #Dollar, $AUDUSD, $USDCAD and #Bitcoin Technical Levels - Webinar Archive - https://t.co/dkI9RkpZ4w
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.08% 🇬🇧GBP: -0.18% 🇦🇺AUD: -0.19% 🇯🇵JPY: -0.41% 🇪🇺EUR: -0.42% 🇳🇿NZD: -0.42% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/768NGH3tot
  • #Gold just hit a fresh multi-month low as the precious metal dropped to trade around the $1,680 level. The metal broke through support alongside the rise in yields in February, falling from around $1,800 to its current lows. $XAU $GLD https://t.co/oJvQqE5gfR
  • Indices Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Germany 30: 3.35% France 40: 2.17% FTSE 100: 1.38% Wall Street: 1.31% US 500: 0.88% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/fLfJGdE5Hl
  • Hey traders! Get your Monday market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/QO6zl1auQk
  • Really great article - apposite on International Women's Day but also a great read on the other 364 days of the year. @DailyFX h/t Weld Royal and Izaac Brook https://www.dailyfx.com/forex/fundamental/article/special_report/2021/03/08/Three-Women-Leaders-Changing-Finance-Economics-and-Business.html
  • $USDCHF has risen to fresh seven month highs today as the pair continues to trade above the 0.9300 level, at its highest levels since July of 2020. $USD $CHF https://t.co/spI5eIP3NM
  • Germany 30 IG Client Sentiment: Our data shows traders are now at their least net-long Germany 30 since Jan 09 when Germany 30 traded near 14,102.20. A contrarian view of crowd sentiment points to Germany 30 strength. https://www.dailyfx.com/sentiment https://t.co/kBUVfEOnTp
Trading Price Action - Triangles

Trading Price Action - Triangles

James Stanley, Senior Strategist

Trading in ranging or congested periods in the market can prove challenging for a number of reasons; and because of this many traders choose to wait for prices to breakout before looking to initiate a position.

This article will walk through one of the more common congestion patterns in use by price action traders: The Triangle; as well as possible ways that traders can look to play this pattern.

What is a triangle?

A triangle is a period of activity in which prices form what literally appears to be a triangle, or wedge on the chart. The below picture will illustrate a ‘descending triangle:’

Trading Price Action - Triangles

Created with Marketscope/Trading Station

As you can see, the currency pair is in the process of making lower highs and lower lows; but it has not yet been able to decisively break through previously established support.

This tightening range of prices can offer a potential setup to the price action trader. Before we get into how to plot trades on triangles, let’s take a look at another flavor of the triangle formation.

Trading Price Action - Triangles

Created with Marketscope/Trading Station

How to trade Ascending/Descending triangles

The most common way of playing triangles is to look for breakouts as either support or resistance is being broken. With the Ascending or Descending Triangle the trader has luxury of a strong element of support and/or resistance to utilize. Let’s take a look at the same descending triangle we looked at a moment ago:

Trading Price Action - Triangles

Created with Marketscope/Trading Station

As the currency pair is making lower highs while buckling up to a strong support line, traders can get the idea that the weakness in the pair isn’t quite great enough to break through, but at some point, may be able to. And if price momentum is strong enough to break through support, price may be able to continue to run.

So many traders will go into a Descending triangle as we see above with a bearish stance, looking to enter the trade once support can become broken. This can be done by placing an entry order to go short below support.

For Ascending Triangles, the trader can look to a bullish bias as higher lows have been unable to break through resistance. The trader can look to enter by placing an entry order to go long above resistance.

Symmetrical Triangles are a little different as a strong element of static support and/or resistance isn’t available in the same way as it might be with an ascending or descending triangle.

With a symettrical triangle, because price action is narrowing by making both higher lows and lower highs, traders might be unsure of which direction a possible breakout may occur.

As such, it may be more prudent to wait until the break of support or resistance takes place; and then looking to trade the pair in that direction.

Trading Price Action - Triangles

Created with Marketscope/Trading Station

Next: Mastering Triangle Patterns (21 of 47)

Previous: Triangle of Trade

--- Written by James B. Stanley

You can follow James on Twitter @JStanleyFX.

To join James Stanley’s distribution list, please click here.

Trading Price Action - Triangles

How to Analyze and Trade Ranges with Price Action

How to Identify Positive Risk-Reward Ratios with Price Action

Trading Trends by Trailing Stops with Price Swings

How to Trade the Parity Channel with USDCAD

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES