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%  
  Targets    Overview: 12/02/2024  
  Down arrow44,000 or 46,000 by 12/15/2024
  Down arrow17,025 or 18,000 by 12/15/2024
  Down arrow1,025 or 1,100 by 12/15/2024
  Up arrow20,000 or 18,500 by 12/15/2024
  Up arrow6,200 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%  
  Targets    Overview: 12/02/2024  
  Down arrow44,000 or 46,000 by 12/15/2024
  Down arrow17,025 or 18,000 by 12/15/2024
  Down arrow1,025 or 1,100 by 12/15/2024
  Up arrow20,000 or 18,500 by 12/15/2024
  Up arrow6,200 or 5,900 by 12/15/2024

Bulkowski on Symmetrical Triangles

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.

-- Tom Bulkowski

$ $ $

Trading lessons added 6/24/24.

Symmetrical triangles, sometimes called coils, appear often on the historical price chart but performance is awful.

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): 36 out of 39/34 out of 36
Break even failure rate for up/down breakouts: 25%/37%
Average rise/decline: 34%/12%
Throwback/pullback rate: 62%/65%
Percentage meeting price target for up/down breakouts: 58%/36%

The above numbers are based on over 3,000 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 one trendline at least three times and the other trendline at least twice, forming distinct valleys and peaks.
VolumeTrends downward 84% to 86% of the time.
BreakoutUpward 60% of the time and 74% of the way to the triangle apex (for both breakout directions).

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Symmetrical Triangles: Trading Tips

Trading TacticExplanation Symmetrical triangle measure rule
The Measure Rule
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 downward 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.

 

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

 

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Symmetrical triangle chart pattern example

Symmetrical Triangles: 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.

Top of page More

Symmetrical Triangles: Other Examples

Symmetrical Triangles: Trading Lessons

I present the information in slider format, so be sure to click the left or right arrows to view another slide.

Lessons Summary

 

1 / 7
Chart of AAPL

In this trade, I thought the stock would climb far enough to make a second peak, similar to the one at A, and then drop. Indeed, the stock climbed to the green dot (ultimate high) before turning into a loss. The stock didn't reach the measure rule target.

Next chart please.
2 / 7
Chart of ALRM

Stocks rise in a stair-step fashion. The rise is often proportional to the step. In this case, we see a long horizontal step (A, in red), followed by a rise that is too short for the length of the step. So I guessed that the stock would continue higher, and it did. The red dot says the stock hit the measure rule target.

Next chart please.
3 / 7
Chart of AMWD

Sometimes chart patterns (like flags) are half-staff patterns. By that, I mean they appear in the middle of a trend. This is an example. Trend CD is almost equal to AB with the symmetrical triangle in the middle. After a gap down at E, caution is advised but the trade worked well. Unfortunately, I haven't found a good way to determine if a pattern will appear midway in a trend.

Next chart please.
4 / 7
Chart of AON

In this trade, I predicted that overhead resistance setup by the early 2011 sideways move (highlighted by the two long red lines) would stop the upward move. The stock fell short of the 53.32 target and plunged for a loss.

Next chart please.
5 / 7
Chart of APD

The uptrend began in October 2012 and I guessed that the first symmetrical triangle would meet the measure rule target. It did. However, the second one was too far along in the uptrend so I thought it would fail. And that's what happened.

Next chart please.
6 / 7
Chart of APD

This is the same stock as the prior chart. In this example, I thought that 1) the uptrend was too long (which is why the prior trade failed) and 2) that the stock would not be able to rise far enough to meet its target. And it didn't. The trade ended in failure after being scared away by overhead resistance setup by the peak circled in red. It might also be worth exploring that if the prior symmetrical triangle failed then this one might, also. I don't know if that's true or not.

Next chart please.
7 / 7
Chart of AWI

Something happened to the stock at A, where it gapped down. I didn't do research to find out the reason why. Should you take the trade at symmetrical triangle B? Probably not. Yes, you might expect a retrace (a bounce), but it already happened. If a company is having trouble with cost overruns at a plant they are building (for example), they might not get it solved by the end of the next quarter, so another gap down could occur. Even though this trade worked (the red dot shows that it hit the target during that price bar), holding longer meant taking a loss. In short, this stock is too risky to own.

Indeed, in another symmetrical triangle (not shown) starting 4/27/2012, the stock gapped down, the triangle formed as part of the bounce, and the triangle broke out downward and made another gap lower.

The end.

-- Thomas Bulkowski

See Also

 

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