CFD Trading Strategy - Symmetrical Triangles Upside Breakout
The symmetrical triangle can be traded very successfully on the long side entering the trade as the stock breaks out to the upside. The pattern forms when the two boundary lines that contain the price movement converge to a point. The bottom line slopes up toward the top line which slopes down. Both lines have nearly the same slope as each other which is why the pattern is called symmetrical.
Symmetrical Triangles, Unpredictable but Profitable
Symmetrical triangle breakouts show a slight bias to the upside with patterns breaking up 56% of the time. This upward bias is likely due to the overall bullish bias of the market as the symmetrical nature of the pattern does not clearly indicate a breakout direction. The breakout of symmetrical triangles can deliver strong returns with 44% of the patterns being profitable. The average return for the long trades is 0.85% in 9 days.
Improve Your Trades
Surprisingly a break to the upside works better in a falling or consolidating market. By using filters that require the market to be in a consolidation or a down trend you can improve the results. If the sector is consolidating or rising the results also improve. This is more as you would expect.
A breakout from a symmetrical triangle should be after the pattern has travelled at least 30% of the length. If it breaks out early in the pattern it will produce smaller profits. In a similar way longer patterns that have a length of 25 days or more produce smaller returns.
If the volume is very strong in support of the breakout the results are better. Supportive volume means the volume on the way up is 40% higher than the volume on the way down.
Symmetrical Triangles Deliver Strong Profits
You can improve your trading results by using a series of simple filters that have been outlined here. This select group of symmetrical triangles delivers an average profit of 1.87% in 11 days and is profitable on 55% of the trades. Overall this makes symmetrical triangles attractive to trade.
Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23311
Symmetrical Triangles, Unpredictable but Profitable
Symmetrical triangle breakouts show a slight bias to the upside with patterns breaking up 56% of the time. This upward bias is likely due to the overall bullish bias of the market as the symmetrical nature of the pattern does not clearly indicate a breakout direction. The breakout of symmetrical triangles can deliver strong returns with 44% of the patterns being profitable. The average return for the long trades is 0.85% in 9 days.
Improve Your Trades
Surprisingly a break to the upside works better in a falling or consolidating market. By using filters that require the market to be in a consolidation or a down trend you can improve the results. If the sector is consolidating or rising the results also improve. This is more as you would expect.
A breakout from a symmetrical triangle should be after the pattern has travelled at least 30% of the length. If it breaks out early in the pattern it will produce smaller profits. In a similar way longer patterns that have a length of 25 days or more produce smaller returns.
If the volume is very strong in support of the breakout the results are better. Supportive volume means the volume on the way up is 40% higher than the volume on the way down.
Symmetrical Triangles Deliver Strong Profits
You can improve your trading results by using a series of simple filters that have been outlined here. This select group of symmetrical triangles delivers an average profit of 1.87% in 11 days and is profitable on 55% of the trades. Overall this makes symmetrical triangles attractive to trade.
Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23311
About the Author:
Jeff Cartridge has been trading CFDs since 2002 and created the website LearnCFDs.com Discover Patterns of Success
posted by Mr. Forex at
7:58 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home