Triangles

Triangles (symmetrical, upward, downward)

Symmetrical triangle

The symmetrical triangle more often announces the continuation of the earlier movement than its reversal. Formation is determined by two convergent lines led by two peaks and two bottoms. It is only after determining these four points (1,2,3,4) that the formation of the pattern can be discussed. 

Within the formation, the volume should show a downward trend. Quite often within the triangle there are exactly six turning points before breaking. The buy signal is generated after breaking through the upper edge, while the volume must clearly grow. 

Not infrequently, after breaking, there is a corrective movement. 

The sales signal is generated after piercing the bottom edge of the formation. The break from the symmetrical triangle should occur within 50% to 25% before its end (vertex, peak angle) from the beginning of the formation. Very often the level determined by the vertex of the triangle is a strong support or resistance.

Strategy 

If you have shares:

• when breaking up, sell on the break and buy back the shares on the correction (if the break has been confirmed by the increase in the volume of turnover)
• if it breaks down from the formation, sell it immediately

If you do not have shares:

• buy only on a correction after breaking up (confirmed by the increase in the volume of turnover)

Note: It is very important that the knocking occurs within a certain time (50-25% before the end of the triangle)

An upward triangle

The upward triangle is a formation in which the upper edge is a horizontal line and the lower line is an upward line. Formation can be determined only after the establishment of two peaks  at the same level and two bottoms. During the development of the triangle, the volume of turnover should decrease. The buy signal is generated after breaking through the upper (horizontal) edge with a marked increase in the volume of rotation. Not infrequently, after breaking, there is a corrective movement. The breakout triangle should occur not later than 25% before its end, counting from the beginning of the formation (B), ie the first turning point to the intersection of the triangle arms (E) . The size of the price increase after breaking the triangle should be at least equal to the height of the formation measured at the second turning point (see the purple line in the figure). Very often, the level determined by the top edge is strong support after breaking out X

Strategy: 

If you have shares:

• when breaking up, sell on the break and buy back the shares on the correction (if the break has been confirmed by the increase in the volume of turnover)
• if you break down from the formation, beware of other sales signals and if they occur, sell immediately

If you do not have shares:

• buy only on a correction after breaking up (confirmed by the increase in the volume of turnover)

Note: It is very important that the knocking occurs within a certain time (not later than 25% before the end of the triangle, preferably around 2/3 of the formation's length)

A downward triangle

A downward triangle is a formation in which the bottom edge is a horizontal line and the upper line is a downward line. Formation can be determined only after establishing two lows at the same level  and two tops. During the development of the triangle, the volume of turnover should decrease. The sales signal is generated after piercing the bottom (horizontal) edge. Sometimes, after breaking, there is a corrective movement (marked in green). The break from the downhill triangle should occur not later than 25% before its end counting from the beginning of the formation (B), ie the first turning point to the intersection of the triangle arms (E).  The size of the drop after breaking the triangle should be at least equal to the height of the formation measured at the second turning point (see the purple line in the figure). Very often, the level determined by the bottom edge is a strong resistance (X).

Strategy

If you have shares:

• if it breaks down from the formation, sell it immediately

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