Triangle is one of the most famous figures of technical analysis. It is quite common when analyzing the chart. Traders like triangles because there is a high probability of breaking this figure and a good price movement, which means that there is a possibility to make a profit.

Triangles are found on all charts and timeframes. The higher the timeframe, the more reliable the signal.

Types of triangles

There are several types of triangle pattern:

1. Upward – directed upward. Possible location of the resistance line (i.e. the upper one) – either upward, or it is located horizontally. Expected price movement – upward.

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2. Downward – directed downward. The resistance line (lower) is directed downward or is located horizontally. Most often the price breaks through such a triangle downwards.

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3. Symmetrical. It does not have a pronounced directional angle, the trend lines of such a triangle converge approximately in the middle of the pattern. Most often, the price breakdown occurs in the direction of continuation of the current trend. In Fig. 3 – on the contrary, the price has turned upward.

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How to trade triangle patterns?

How to determine the entry point? As soon as the price has broken through any of the trend lines and continues to move, you can open a deal. There is a very high probability of success if we see the price rebound from the broken trend line, that is, the continuation of the movement. It is also possible to open a deal if the price has updated the local maximum or minimum of the triangle.

It is considered ideal to open a position in case of a breakout that occurred in the first 2/3 of the pattern. If the breakthrough of the triangle occurred in the remaining third of the pattern, you should be careful, because false breakdowns often occur in this segment.

Stop orders. In order to set Take Profit, it is necessary to estimate the “width” of the triangle and postpone a similar number of points from the price breakout level. As an option, the trader can draw a line that is parallel to the opposite side of the figure. Thus we will see a parallel channel.

Stop Loss – most often, this stop order is set on the opposite side of the pattern.

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The Triangle pattern has been and remains a relevant and reliable figure of technical analysis in any markets.