Forex trading strategy with Triangle pattern in Olymp Trade

Forex trading strategy with Triangle pattern in Olymp Trade
Forex trading strategy with Triangle pattern in Olymp Trade

In technical analysis, an increase or decrease in asset prices is often signaled by price patterns. In fact, the price pattern is one of the leading tools that help traders determine the amplitude of an asset’s bullish or bearish movement. For example, the rate of currency pairs, gold, options contracts, etc., all thanks to the trend lines on the price chart. Join us in detail about the Triangle pattern with the highest probability of success. It is frequently used by traders when trading Forex in Olymp Trade.

What is the Triangle pattern?

What is the Triangle pattern?

A Triangle pattern is an accumulation pattern that occurs in between a trend and usually signals the continuation of the current trend. This pattern consists of two converging trend lines when the price is temporarily moving sideways. Traders often look for the next breakout following the previous trend as a signal to enter a trade.

Symmetrical Triangle pattern

A Symmetrical Triangle pattern appears when the downward resistance and the upward support meet on the right side of the pattern. Technically, for the pattern to take effect, the downward resistance and the upward support must be touched twice by the price before breaking out.

Symmetrical Triangle pattern

Ascending Triangle pattern

This pattern appears when the horizontal resistance hits the upward support on the right side of the chart. For the Ascending Triangle pattern to take effect, both lines must be touched twice by the price before breaking out of the resistance.

Ascending Triangle pattern

Descending Triangle pattern

A Descending Triangle pattern appears when the downward resistance hits the horizontal support. For this pattern to take effect, both lines must be touched twice by the price before breaking out of the support.

Descending Triangle pattern

Meaning of the Triangle pattern

Symmetrical Triangle

For Symmetrical Triangle patterns, in terms of psychology, this pattern represents a pause of a trend. So if there is nothing special, the price tends to move forward. However, this is also a quite sensitive period because the confidence of both sides is very fragile. If there is a strong enough force on any side, the price will break out and follow that side.

Ascending Triangle

In terms of psychology, this pattern also represents a pause of a trend. Previous buyers sell out because they feel that the price has increased quite a bit. However, the sellers only accept to sell when prices reach the top. This forms a horizontal resistance. However, prices are continuously pushed up. This movement is mainly due to the basic information factor which creates the confidence that the price is still up.

For other markets like forex, although you cannot see the volume, based on psychology, visualization, and experience, the probability of a bullish breakout is higher than a bearish one

Meaning of the Triangle pattern

Please remember that it is just probability. Prices can always go in any direction.

Descending Triangle

For the Descending Triangle, as per the standard, a clear trend needs to persist and last for at least a few months. Since then, the Descending Triangle pattern marks an accumulation period before continuing the trend after the breakout.

One basic rule of technical analysis is that support will become a new resistance level and vice versa. When the horizontal support level of the Descending Triangle is broken, it becomes a new resistance level. Sometimes, the price bounces back to this new resistance level before fluctuating sharply in the downward direction.

Once a breakout occurs, a price target is calculated by measuring the pattern’s widest distance and then subtracting it from the price at the breakout point.

Entry points and how to trade with a Triangle pattern

The Triangle pattern gives an entry signal following the direction of the price breakout. Specifically, when the price breaks out of the resistance and goes up, we open an UP order. And when it breaks out of the support and goes down, we open a DOWN order. Here I will show you how to trade with this price pattern to maximize profits.

How to trade with the Symmetrical Triangle

A Symmetrical Triangle is a pattern with 2 edges created by the two resistance and support levels. In which, the resistance level consists of at least 2 peaks and the support level consists of at least 2 troughs.

In a Symmetrical Triangle, there will be higher peaks and lower troughs. This means that neither the buyers nor the sellers are able to push prices further to create a clear trend. In this case, both the buyers and the sellers are tied in this battle.

Open an UP order when the breakout candlestick is upward in a Symmetrical Triangle pattern.

Stop-loss: At the lowest trough of the Symmetrical Triangle.

Take-profit: From the entry point, the length is equal to the widest price amplitude generated within this pattern.

Trade with an upward breakout within the Symmetrical Triangle in Olymp Trade

Open a DOWN order when the breakout candlestick is downward in a Symmetrical Triangle pattern.

Stop-loss: At the highest peak of the Symmetrical Triangle.

Take-profit: From the entry point, the length is equal to the widest price amplitude generated within this pattern.

Trade with a downward breakout within the Symmetrical Triangle in Olymp Trade

How to trade with the Ascending Triangle

In an Ascending Triangle, the buyers cannot get past the sellers. However, the buyers are starting to push the price higher by pushing the following trough higher than the previous one.

A lot of people believe that the bulls always win and the price will break out of the resistance. However, this is not always the case. Sometimes the resistance is so strong that the bulls don’t have enough strength to push the price through it.

Open an UP order when the breakout candlestick of the resistance zone appears completely.

Stop-loss: At the lowest trough of the Ascending Triangle.

Take-profit: From the entry point, the length is equal to the widest price amplitude generated within the Ascending Triangle pattern.

Trade with the Ascending Triangle in Olymp Trade
Trade with the Ascending Triangle in Olymp Trade

How to trade with the Descending Triangle

The Descending Triangle is the reversal of the Ascending Triangle. The price below the support is impenetrable.

In most cases, prices will break the support level and continue to decline.

Open a DOWN order when the breakout candlestick of the support zone appears completely.

Stop-loss: At the highest peak of the Descending Triangle.

Take-profit: From the entry point, the length is equal to the widest price amplitude generated within the pattern.

Trade with a Descending Triangle pattern in Olymp Trade

However, in some cases, the support becomes a stiff level which makes the price bounce up to create a new uptrend. If this happens, you will never know how far the price will go. Start looking for entry points to make as much profit as possible.

Things to note about the Triangle pattern

– Wait for the breakout of the triangle to open an order.

– Set a clear stop-loss and take-profit when finishing drawing the Triangle pattern.

– Do not trade when there is news.

Before practicing with real money, you should first experience with a demo account. In the coming time, we will do real trades with this pattern. Please stay tuned!

Forex trading strategy with Triangle pattern in Olymp Trade
4.9 (98%) 38 reviews

LEAVE A REPLY

Please enter your comment!
Please enter your name here