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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Symmetrical Triangles

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 07/31/2015
17,690 -56.12 -0.3%
8,392 -27.82 -0.3%
584 5.06 0.9%
5,128 -0.50 0.0%
2,104 -4.79 -0.2%
YTD
-0.7%
-8.2%
-5.5%
8.3%
2.2%
Tom's Targets    Overview: 07/27/2015
17,900 or 17,200 by 08/15/2015
8,700 or 8,000 by 08/15/2015
590 or 550 by 08/15/2015
5,200 or 4,850 by 08/15/2015
2,120 or 2,025 by 08/15/2015
Wilder RSI: -4.4%

Written by and copyright © 2005-2015 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You and you alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 748 to 764.

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Symmetrical triangles, sometimes called coils, are a popular chart pattern because they appear often and perform reasonably well in a bull market. This opinion is based not on the performance rank, which is mediocre, but on trading experience.

 

Score your pattern for
performance

Symmetrical triangle chart pattern

Symmetrical Triangle Chart Pattern

Symmetrical Triangles: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): 16 out of 23; 15 out of 21
Break even failure rate for up/down breakouts: 9%; 13%
Average rise/decline: 31%; 17%
Throwback/pullback rate: 37%; 59%
Percentage meeting price target for up/down breakouts: 66%; 48%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Symmetrical Triangles: Identification Guidelines

CharacteristicDiscussion
Price trendCan be any direction leading to the chart pattern.
ShapeTriangular. Prices move between two converging trendlines.
TrendlinesTwo trendlines bound prices; the bottom trendline slopes up and the top one slopes down.
CrossingPrice must cross the pattern from side to side, filling the triangle with price movement, not white space.
TouchesPrice must touch each trendline at least twice, forming distinct valleys and peaks.
VolumeTrends downward 86% of the time.
BreakoutUpward 54% of the time and 75% of the way to the triangle apex (upward breakout) and 73% of the way for downward breakouts.
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Symmetrical Triangles: Trading Tips

Trading TacticExplanation
Measure ruleCompute the height from the highest peak (point A in The Measure Rule figure to the right) to the lowest valley in the pattern (B) then multiply it by the above “percentage meeting price target.” Add it (upward breakouts) or subtract it (downward breakouts) from the breakout price. The breakout price is the point at which price pierces the trendline. The figure shows an upward breakout with target price C.
Breakout volumePatterns with heavy breakout volume (above the 30-day average) do better.
Yearly lowTriangles with breakouts within a third of the yearly low perform best.
Trend startTriangles perform best post breakout when they appear at the start of trends.
Throwbacks and pullbacksThrowbacks and pullbacks hurt post breakout performance.
Symmetrical triangle measure rule
The Measure Rule

 

Expect the market to turn when it reaches the apex of the triangle. See Triangle Apex and Turning Points.

 

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Symmetrical Triangles: Example

Symmetrical triangle chart pattern example

The figure to the right shows an example of a symmetrical triangle chart pattern.

The consolidation pattern of the symmetrical triangle forms as volume recedes. Then, price breaks out downward, but within a few days, price reverses and shoots out the top of the symmetrical triangle, busting the pattern and leading to a strong move upward.

Busted patterns (when the breakout is in one direction only to see price reverse and breakout in the opposite direction) often result in strong moves. However, symmetrical triangles have a tendency to double bust -- the final breakout direction is the same as the original one.

 

-- Thomas Bulkowski

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Other Symmetrical Triangles Examples

See Also

 

Written by and copyright © 2005-2015 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You and you alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. I don't suffer from insanity. I enjoy every minute of it.