What are Symmetrical Triangles?
Symmetrical triangles consist of two lines of equal slope converging to a point in the future. The result is the appearance of a sideways triangle with the base to the left and the point the right.
Why are Symmetrical Triangles important?
A symmetrical triangle implies that the market cannot decide whether to break up or down. Once the triangle is broken by the price, there may be a substantial move in the direction of the break.
So how do I use Symmetrical Triangles?
Symmetrical triangles can be used to interpret large breaks in price. If the price breaks through the triangle to the downside, there may be a large move down. Similarly, if the price breaks through the triangle to the upside, there may be a large move up. We may use these to help identify trend or to confirm a Gartley or butterfly pattern.
Example 1: Symmetrical Triangle formation - EUR/USD, 4-hour
Example 2: Symmetrical Triangle formation - USD/SEK, 4-hour
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