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. See our updated Privacy Policy here.

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
More View more
Real Time News
  • Rising energy prices weigh on European policymakers as consumers fear higher prices, carbon dioxide shortages (CO2), and cold winter. Get your market update from @Tams707 here:https://t.co/HLDN2JGfAf https://t.co/tWhlMrXN4G
  • US President Biden: - Will discuss a trade deal with UK PM Boris Johnson - I do not want to see a closure of Irish borders
  • AUD/USD continues to trend lower ahead of tomorrow's FOMC meeting. Further $USD strength could bring the August low into play $AUDUSD https://t.co/X3zfpYN8Qe
  • Nasdaq Ekes Out Small Gain As Focus Turns to FOMC, Uber Flies On Bullish Guidance $NDX $UBER #trading #FED https://t.co/1uL1Ao3o3v
  • Fedex Q1 Results: Revenues: $22.0B vs. $21.8B est. EPS $4.37 vs. $4.92 est. $FDX down roughly 2.25% AH
  • In this week's Macro Setup @CVecchioFX, discusses with @RiskReversal and @GuyAdami, news regarding property developer Evergrande weighing down US financial markets, and September's Fed meeting impact on assets. Tune into the markets now!https://t.co/dBgjbpXLXL https://t.co/WXLoq1O1PL
  • Copper demand continues to outstrip supply, according to the recent update from the International Copper Study Group. Get your $XAG market update from @CVecchioFX here:https://t.co/23ii112k1E https://t.co/xHZfC2sffQ
  • China to be carbon-neutral by 2060; country will stop building coal-powered projects abroad - BBG
  • Curious to know if this is because a) bailout by Beijing is still widely viewed as the base case scenario if contagion materializes and/or b) recent backstops implemented globally to curb financial market fallout have effectively supplanted left tail risk https://t.co/cFSXtb1WfQ
  • video uploaded from today's webinar https://t.co/CCrY3mYRjL
Mastering Triangle Patterns

Mastering Triangle Patterns

Richard Krivo, Trading Instructor

Triangle patterns form when price action oscillates between support and resistance and consolidates in the process. The objective of this article is to show how to trade a triangle pattern using the chart below as a template. The benefit to the reader will be that when they see this pattern on a chart, they will be able to identify a basic procedure for trading it.

On the 4 hour chart of the GBPJPY below you can see how price action begins to tighten or “coil up” between support, the lower black line, and resistance, the upper black line. As with anything that keeps on being compressed over time, an ultimate breakout will take place.

Mastering_Triangle_Patterns_body_4jypav1t.png, Mastering Triangle Patterns

Entry Signal:

The candle labeled “entry candle” is currently just above our triangle resistance line. If this candle closes above that resistance line, that will be our entry candle. If it does not, we will continue to bide our time for either a bullish or bearish breakout from the pattern.

Stop Placement:

If the entry candle does in fact close above our resistance line, we could enter the trade long with a stop just below the support line in the area labeled “stop” in red. In the case of a downside breakout the stop would be placed above our resistance line.

Limit Placement:

When you look at the far left side of the triangle where the pattern begins, you will see a green line with arrowheads at either end. In the case of any triangle pattern, that distance can be used to roughly determine the distance that price will travel after the breakout occurs.

The green line just to the right of the entry candle is the same length as the one discussed above. In the case of a bullish breakout we would place that line (or simply determine the number of pips it encompasses) as we see it on the chart and set our limit around the top of that line. (We could set our limit just below the top of the limit line to increase the likelihood that our limit would be triggered.)

In the case of a bearish breakout, we would reverse the above process and place the line below support at the point of the breakout.

Richard Krivo

To contact Richard, please email instructor@dailyfx.com . You can follow Richard on Twitter@RKrivoFX.

To be added to Richard’s distribution list, please send an email with the subject line “Notification”, to instructor@dailyfx.com .

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

DISCLOSURES