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Technical analysis has fascinating patterns that help traders spot market opportunities. One of them is the Symmetrical Triangle. In this article, we’ll explore everything you need to know about the Symmetrical Triangle Pattern. Dive in and boost your trading strategy with FBS!
The Symmetrical Triangle is a chart pattern formed when the price movement creates lower highs and higher lows, so two converging trendlines are created. This pattern indicates consolidation before the price breaks out either upward or downward, usually with a surge in volume.
If the breakdown originates from the lower trend line, the following trend will be bearish; and, on the contrary, a breakout from the upper trend line signals the start of a bullish trend.
However, it is important not to mistake this pattern for Wedges! The two trend lines must converge at a single point in the future. We’ll break down the differences between a Symmetrical Triangle and other patterns below.
If you want to learn more about essential patterns in technical analysis, read the FBS article “Top 15 Most Significant Stock Chart Patterns”.
Unlike some other chart patterns, the Symmetrical Triangle does not in and of itself signal a bullish or bearish trend. Instead, it is considered neutral: it often continues the existing trend, and the actual breakout direction depends on market sentiment. In other words, the pattern does not help predict the direction in which the price will move, but it creates conditions for a potentially strong movement in either direction.
To calculate the price target, traders use a method based on the height of the triangle.
First, measure the height of the triangle: subtract the first low from the first high. For example, the highest point at the start of the triangle is $110, and the lowest point is $100. That makes the height $10.
Then identify the breakout or breakdown point (the price level where the breakout or breakdown occurs).
The final step: for a bullish breakout, simply add breakout point plus height. For example, the breakout happens at $108 and the triangle height is $10. In this case the price target $108 plus $10 equals $118.
For a bearish breakdown subtract the height from the breakdown point. For instance, the breakdown happens at $98 and the triangle height is $10. The price target is then $88 ($98 minus $10 equals $88).
Traders often place a stop-loss order just below the breakout point to reduce risk if the breakout fails (known as a “false breakout”).
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Spotting the pattern in real trading may take some practice, but there are several key features that help you identify a Symmetrical Triangle Pattern.
Look for converging trendlines: the upper trendline slopes downward and connects lower highs, while the lower trendline slopes upward, connecting higher lows. On a chart, these lines should converge at an angle, not horizontally.
Watch the trading volume: it usually declines when a symmetrical triangle forms, indicating consolidation. However, when the breakout happens, there’s usually a considerable rise in volume.
As we mentioned earlier, a Symmetrical Triangle Pattern is neutral and represents a period of indecision in the market, but the breakout can occur either upward or downward.
The breakout should be a decisive candle (strong body) that closes outside the triangle, supported by increasing volume.
The timeframes can vary from from weeks to months.
Trading a Symmetrical Triangle Pattern requires patience and discipline.
First, identify the pattern using the key features below.
Once it’s clear, wait for confirmation of a breakout in one direction. Don’t assume the direction of the breakout: a premature entry inside the triangle increases your risks. Look for a strong breakout candle along with a volume surge and a close outside the trendline.
Ideally with high volume, enter in the direction of the breakout. If the downtrend line is broken, enter a buy position. If the uptrend line is broken, enter a sell position.
Place your stop-loss just inside the triangle, below the breakout point for longs or above for shorts. A stop-loss should protect you from false breakouts. To avoid them, retest the breakouts and use some other indicators (for example, MA crossovers or RSI).
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Symmetrical Triangles may look similar to some other patterns such as Pennants, Ascending and Descending Triangles. It’s important not to mistake one for another. Technical analysis provides you with an opportunity to identify price movements, and the ability to recognize each of these patterns at a glance is helpful. Take a look at the chart below.
| Feature | Symmetrical Triangle | Pennant | Ascending Triangle | Descending Triangle |
| Pattern shape | Converging trendlines (lower highs and higher lows) | Small triangle with a flagpole (brief consolidation) | Flat top and rising bottom (horizontal resistance) | Flat bottom and falling top (horizontal support) |
| How the trendlines move | Upper line moves down, lower line moves up | Similar to symmetrical triangle, but smaller | Flat resistance and rising support | Flat support and falling resistance |
| Preceding trend required? | No | Yes, must follow a sharp move (flagpole) | Often follows an uptrend | Often follows a downtrend |
| Volume behavior | Declines during formation | Sharp drop after flagpole, then picks up on breakout | Declines inside the triangle | Declines inside the triangle |
| Breakout direction | Neutral, breakout can go upwards or downwards | In the direction of the flagpole (continuation) | Usually bullish (breaks upward) | Usually bearish (breaks downward) |
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