As of 12/05/2024
Indus: 44,766 -248.33 -0.6%
Trans: 16,976 -190.93 -1.1%
Utils: 1,047 +2.22 +0.2%
Nasdaq: 19,700 -34.86 -0.2%
S&P 500: 6,075 -11.38 -0.2%
|
YTD
+18.8%
+6.8%
+18.8%
+31.2%
+27.4%
|
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
|
As of 12/05/2024
Indus: 44,766 -248.33 -0.6%
Trans: 16,976 -190.93 -1.1%
Utils: 1,047 +2.22 +0.2%
Nasdaq: 19,700 -34.86 -0.2%
S&P 500: 6,075 -11.38 -0.2%
|
YTD
+18.8%
+6.8%
+18.8%
+31.2%
+27.4%
| |
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
| ||
For more information on this pattern, read Encyclopedia of Chart Patterns, 3rd Edition. If you click on the link and then buy the book (or anything) during the visit at Amazon.com, the referral will help support this site. Thanks.
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Trading lessons added 6/24/24.
Symmetrical triangles, sometimes called coils, appear often on the historical price chart but performance is awful.
The above numbers are based on over 3,000 perfect trades. See the glossary for definitions.
Characteristic | Discussion |
Price trend | Can be any direction leading to the chart pattern. |
Shape | Triangular. Prices move between two converging trendlines. |
Trendlines | Two trendlines bound prices; the bottom trendline slopes up and the top one slopes down. |
Crossing | Price must cross the pattern from side to side, filling the triangle with price movement, not white space. |
Touches | Price must touch one trendline at least three times and the other trendline at least twice, forming distinct valleys and peaks. |
Volume | Trends downward 84% to 86% of the time. |
Breakout | Upward 60% of the time and 74% of the way to the triangle apex (for both breakout directions). |
Trading Tactic | Explanation |
The Measure Rule
|
Measure rule | Compute 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 volume | Patterns with heavy breakout volume (above the 30-day average) do better. | |
Yearly low | Triangles with downward breakouts within a third of the yearly low perform best. | |
Trend start | Triangles perform best post breakout when they appear at the start of trends. | |
Throwbacks and pullbacks | Throwbacks and pullbacks hurt post breakout performance. |
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.
I present the information in slider format, so be sure to click the left or right arrows to view another slide.
-- Thomas Bulkowski
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