Make $1750 easily with the Triangle pattern in Forex from Olymp Trade

Make $1750 easily with the Triangle pattern in Forex from Olymp Trade
Make $1750 easily with the Triangle pattern in Forex from Olymp Trade

This article will review how to trade with the Triangle pattern in Forex from Olymp Trade, making a profit of $1750 in the past week.

Other investors are staring at the screen for many hours to look for good entry points to bring them profits. Somewhere, there are traders who are leisurely looking at charts for just 1 or 2 times a day.

They do not spend much time on trading, but their profits are much higher than other traders. Are they divine? No, they are not. They simply use the trading strategy with the chart pattern and take advantage of it.

Review on trading orders using Triangle pattern in Olymp Trade Forex

Conditions: A 5-minute Japanese candlestick chart.

Open UP orders when: The price breaks out of the important resistance zone of the chart pattern.

Open DOWN orders when: The price breaks out of the important support zone of the chart pattern.

Investment amount per order $500, Take-profit 100% ($500), Stop-loss 50% ($250).

Pattern 1: An Ascending Triangle pattern appeared. Opened a Buy order when the price broke out of the resistance.

Trading with an Ascending Triangle pattern in Olymp Trade Forex on September 04

Pattern 2: A Descending Triangle pattern appeared. Opened a Sell order when the price penetrated the resistance.

Trading with a Descending Triangle pattern in Olymp Trade Forex on September 09

Pattern 3: A Symmetrical Triangle pattern appeared. Opened a Sell order when the price broke out downwards.

Trading with a Symmetrical Triangle pattern in Olymp Trade Forex on September 10

Pattern 4: The trend was down and formed a Descending Triangle pattern. Opened a Sell order when the price broke out of the support to expect that the price would continue to decline.

Trading with a Descending Triangle pattern in Olymp Trade Forex on September 15

Pattern 5: An Ascending Triangle pattern appeared. Opened a Buy order when the price broke out of the resistance.

Trading with a Descending Triangle pattern in Olymp Trade Forex on September 16

How is a Triangle pattern formed?

If you don’t know how the Triangle pattern is formed, how can you open a safe order? Now, we will find out the details of how it is formed.

Formation stages of the Triangle pattern

(i) The price level reaches a point during its trend where it loses strength and reverses.

(ii) This price trend continues until it encounters a force from the opposite direction and reverses again. In the accumulation channel, the price can rise in the direction of the original trend and eventually break out. This is the first trace for a Triangle pattern to form.

You can see that the next reversal will take less time and distance. Also, after a reversal occurs, the price may not be able to completely move back to the previous support level with bullish patterns or the previous resistance level with bearish patterns.

How Symmetrical Triangle pattern forms

In the Ascending Triangle pattern, there is almost the same resistance on each bull. But every drop in this pattern stops a bit higher than the previous bottom. This fundamental strength warns traders of a potential imminent breakout.

Ascending Triangle pattern

In a Descending Triangle pattern, the price reaches the same support level on each decline. But every increase in this pattern stops a bit lower than the previous top. This lack of strength signals traders of a potential imminent breakout.

Descending Triangle pattern

(iii) This formation of shorter and smaller price steps continues as a cord until the price finally exits the pattern breaking the support or the resistance during the process. Along the path, the volume will decline as the price moves to the top before breaking out of the final price.

Once the breakout of the resistance or support occurs, the volume of transactions will spike.

Trading strategy with the Triangle pattern

In the market, there will be an endless number of cases where prices are not as good as the original standard patterns. So with each case, there will be a flexible strategy to open orders without following a trail.

Breakout strategy

The breakout strategy can be used on all types of price patterns. The performance is the same regardless of ascending, descending, or symmetrical Triangle pattern.

Open an UP order when the price of an asset breaks out of the resistance in the Triangle pattern, or a DOWN order when the price breaks out of the support.

Because each trader can draw different support/resistance levels, the entry point may also vary depending on the trader. To help you realize when the price has actually exited from the pattern, looking at the volume would do.

Breakout strategy with Triangle pattern

The profit target is the point to exit the trade once the desired expectation is reached. Usually, good traders won’t interfere with an order which is in position. Ultimately, the price will reach the target stop-loss or take-profit.

The problem is that sometimes trading can be profitable but its goal is not achieved because closing the order on our own. Traders should add additional criteria to their exit plan, such as exit a trade if the price starts to trend the opposite of the position.

The strategy of predicting the strength of a chart pattern

This strategy predicts that the chart pattern will hold or predict the final breakout direction. By identifying the direction of the future breakout, it helps traders to find trades that have the potential of huge profit versus risk.

In a Triangle pattern, sometimes, traders believe that the price will eventually break out to move up. In this case, we can buy at the support of the triangle instead of waiting for a breakout. By buying near the bottom of the chart pattern, traders will get a much better price with the stop-loss placed right in the middle of the triangle instead of right at the bottom as usual. Due to the lower entry point, traders who follow the strategy of predicting will make more money than traders who are waiting for a breakout.

Trading strategy by predicting a Triangle pattern to be in an uptrend

A trader can also predict that the price will eventually break out of the triangle in a downward direction. Then they can short sell near the resistance and place the stop-loss just above the triangle. By selling near the top of the chart pattern, traders get a much better price than they would when expecting a breakout.

Trading strategy by predicting a Triangle pattern to be in a downtrend

The volume of a position and risk management

Always use a stop-loss. Even if the price starts to move in your favor, it can reverse at any time. Having a stop-loss means that risk is under control. Traders will exit the trade with a minimal loss if the asset does not go in the expected direction.

Manage risks when trading Forex in Olymp Trade

Having a stop-loss also allows a trader to choose the ideal position volume as expected. The position volume is how many lots (Forex market) there are.

To calculate the ideal position volume, determine your willingness to risk for a position. Professional traders typically risk 2% (or less) of their balance on any single trade. Calculate 2% of your balance in the amount of money.

For example, If your balance is $2,000, you can risk up to $40 per trade.

False breakouts are the major problem that forex traders face more often when trading with chart patterns. A false breakout is when the price moves out of the triangle, signaling a breakout, but then reverses.

So a stop-loss is an exit when the price has gone in the opposite direction from what has been expected. Avoid placing your account at a gamble that you only hope for luck.

Notes when trading with Triangle patterns

  • Do not mistake this pattern with other patterns with a similar shape such as the Wedge pattern or the Flag pattern.
  • For the Triangle pattern to take effect, the price must touch the support and resistance levels at least twice each.
  • Large trading volume is also an accompanying signal for big price fluctuations in a certain direction.
  • Without using pending orders, investors must incorporate technical indicators, price patterns, or other methods to confirm the signal of the price direction after the breakout to open an order correctly.

In conclusion

Knowing how to recognize and trade with the Triangle patterns is a good skill. They are very common but will not happen every day for all assets. So the patience in waiting for the pattern to appear is also a necessary skill. Practice identifying, drawing, and trading with Triangle patterns in a Demo account before trying to trade with real money.

Make $1750 easily with the Triangle pattern in Forex from Olymp Trade
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