Overview
- When the top and bottom trendlines form a triangle a valuable indicator is formed, often forecasting a sharp subsequent movement when the price breaks out.
- The wider the price fluctuations within the triangle, and the longer the triangle pattern holds, the greater the following price change.
- Good triangles are an intermediate pattern, taking from one to three months to form.
Triangle patterns usually form part way through a strongly trending move and represent a congestive phase in the marketplace. These patterns are important because they are typically followed by sharp increases or declines in price. An established triangle pattern is a valuable signal prior to a relatively predictable price change.
The vertical line measuring the height of the pattern becomes the base of the triangle. The apex is the point of intersection where the two lines meet. There are typically 3 common types of triangles - symmetrical, ascending, and descending:
Labels: Charts
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