Asymmetric Triangle Pattern Trading

The Asymmetric Triangle is also a highly reliable pattern, easy to identify and trade. It consists of two trendlines: One that is horizontal and one that is sloping, converging into the horizontal one. Its interpretation is also very simple to understand: Price is converging in a certain direction until its breakout in this direction. Do not confuse this pattern with the Symmetric Triangle which is more common, but not profitable. Its signals are highly unstable, and it rarely reaches its projected target even when trading a strong signal such as a pullback. Ignore the Symmetric Triangle – you do not need it in your trading arsenal. llustration of the Asymmetric Triangle pattern:
Asymmetric Triangle Pattern Trading
Fig. 1: Illustration of the Asymmetric Triangle Pattern
The psychology behind the pattern
Price is creating lower Highs, indicating that sellers are gaining power, while buyers are staying flat. Eventually sellers win the battle and price breaks the support level. It is a demonstration of one part of the market which is steadily gaining power over the opposite, until a breakout takes place and the patterns comes into effect.
This pattern is traded in 2 ways:
1. Trade after bounce from the trendline.
2. Pullback after breakout of the horizontal level.
Illustrations of trading zones:
Trading zones in the Asymmetric Triangle
Fig. 2: Trading zones in the Asymmetric Triangle
Two trades based on the Asymmetric Triangle
Fig. 3: Two trades based on the Asymmetric Triangle Pattern. The two were on the sloped trendline itself.
 Asymmetric Triangle Chart Pattern
Fig. 4: Two trades based on the Asymmetric Triangle Chart Pattern. The first was a
result of touch at the Resistance trendline – bounce – that was confirmed. The second trade is a pullback of price to the Support level. Note that for both trades the rules of Minimal Risk:Reward ratio is met (Target divided by Stop Loss is greater than 1.5).
Precise pullback entry after an Ascending Triangle pattern
Fig. 5: Precise pullback entry after an Ascending Triangle pattern. Price pulled back to the Resistance level and confirmed a trade after the bullish candle passed the Bearish one. Note that target was not met in this trade. In these cases the Trade Management techniques will make sure that profits are safe.
short entry after a pullback to Support horizontal line
Fig. 6: Very precise short entry after a pullback to Support horizontal line. Price broke the triangle as predicted and pulled back to the support level. Pullback was confirmed by candlesticks and short entry was issued.
Pullback trade at the GBP\JPY
Fig. 7: Pullback trade at the GBP\JPY currency pair. Even at highly volatile pairs the patterns still provide leading trading signals.
Triangle Breakout indicator MT4
Triangle Breakout indicator MT4

In the link below Triangle Breakout indicator MT4
Download: put this link in the URL
https://drive.google.com/file/d/0Bwjv2Pbf48itWWlYN3VnLTk0QVU/view?usp=sharing

Related

Pattern Trading 4744314966317465628

Post a Comment

emo-but-icon

item