Not all triangle patterns are as powerful and reliable. In fact,
triangle patterns often fail to deliver. However, there are 3 secret
characteristics of those which are highly reliable. The profits that
these triangles bring are usually massive, out-sizing the amount of
risk.To get more news about WikiFX, you can visit wikifx official website.
Before diving in to the 3 secret characteristics, youll need to know
how triangle chart patterns look like and the 2 most common types of
triangles.
#1 Ideal Symmetrical Triangle
Characteristics
1. At least 4 swings (up and down)
1. Each peak is lower than the previous and each bottom higher than the previous
2. Prices and volume diminish as the pattern is formed
3. Prices and volume usually move sharply upon the breakout (only for a bullish breakout)
#2 Ideal Right-Angled Triangle
Characteristics
1. At least 4 swings (up and down), with one of the lines being horizontal, hence the name of this triangle pattern
1. Each peak is lower than the previous and each bottom higher than the previous
2. Prices and volume diminish as the pattern is formed
3. Prices and volume usually move sharply upon the breakout (only for a bullish breakout)
What Happens Inside The Triangles?
In a bullish triangle, the bulls and bears are having a massive fight.
Initially, the bulls look to be winning, but the bears wont give up
without a fight. As the bulls push prices up to a certain level, the
bears step in, pushing prices down. The same cycle repeats, forming a
triangle.
In a bearish triangle, the bears force prices down before the bulls
wake up to push prices back up. This cycle repeats, forming a triangle.
3 Secret Characteristics
You have learnt how to identify and differentiate the 2 main types of
triangles. You are ready to discover what the 3 secret characteristics
are.
These 3 secret characteristics improve the reliability of the pattern:
1. The nearer the breakout occurs to the apex, the better
2. The more prices touch the lines, the better
3. Be wary if the volume is low during the bullish breakout
The currency pair that you are looking at is at its all-time high.
You are unsure if you should go Long right now. This pair has been
exceeding expectations for some months now. Your peers have made their
share and you dont want to be left out. But you are afraid.To get more
news about WikiFX, you can visit wikifx official website.
These 2 chart patterns are extremely helpful in warning you of an
upcoming reversal, allowing you to make money. They are the rounding
bottom and rounding top chart patterns.
Just prior to the rounding bottom, prices could be rising or falling.
At the start of the rounding bottom, prices start to fall due to heavier
selling.
After some time, optimism returns and the demand pushes
prices up. This results in the right side of the rounding bottom
forming.Prices are rising. Optimism is high and prices seem to lack
gravity. All of a sudden, prices seem to lose momentum.
Gradually, prices started to decline, forming the right side of the rounding top chart pattern. Pessimism has crept in.
Before you know it, prices plunge below the resistance zone (in gray), never turning back.