Is this a Triangle?

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farid

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Saturday, August 12, 2006 - 03:17 am:

Hi all
Is this a Triangle?
Tri pic.

I drew that by hand.
3 top touches and then 3 bottom touches.

thanks alot

007

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Saturday, August 12, 2006 - 11:53 am:

Hi Farid

you have one criterion for a symmetrical triangle correct in that your trend lines converge, eventually forming an apex. However, your drawing lacks the right price action.

A proper symmetrical triangle will still have your trend lines but will also possess price action that bounces from trend line to trend line, crossing the pattern several times this way before breaking out.

Some examples below.

This ones yet to breakout.

Hope this helps.

Regards

(Message edited by 007 on August 12, 2006)

stickman

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Saturday, August 12, 2006 - 04:45 pm:

Hi

and a few more

Trade to Learn, Not to Earn.

when you lose,don't lose the lesson.

farid

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Sunday, August 13, 2006 - 01:23 am:

Hi 007 and stickman
thanks for your replys.

My drawing lacks the right price action because of my bad drawing,excuse me

I agree with your examples.But as you know,triangles visually depict the struggle between buyers and sellers that becomes more intense as time passes and the triangle narrows.
ok?
and as stockcharts.com says
"At least 2 points are required to form a trend line and two trend lines are required to form a symmetrical triangle. Therefore, a minimum of 4 points are required to begin considering a formation as a symmetrical triangle. The second high should be lower than the first and the upper line should slope down. The second low should be higher than the first and the lower line should slope up. Ideally, the pattern will form with 6 points (3 on each side) before a breakout occurs."

And I think my drawing contains all of these conditions.
You mean we must have a bottom touch after each top touch?

thanks again

(Message edited by colin_twiggs on August 13, 2006)

farid

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Sunday, August 20, 2006 - 05:09 am:

Would you mind replying me?

007

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Sunday, August 20, 2006 - 10:41 am:

Hi Farid,

my apologies for not seeing your August 13 post. Don't know how or why I didnt see it. Don't think Stickman has seen it either so I'll reply on his behalf as well. Don't think he'd mind.

Your description from stockcharts.com of a symmetrical triangle is correct and as long as it looks something like the examples Stickman and I have provided it should be fine.
My biggest problem with your drawing was the way in which you depicted price action, but seeing as this was due to your bad drawing, problem solved!

You've already discovered that its not rocket science. If it looks and acts like a triangle... its a triangle. And, if you've got to look at a chart for more than 2 seconds to determine if a particular type of formation exists... it doesnt.

Regards

P.S I forgot to welcome you to the forum in my initial response.

Welcome! There's plenty of fun characters to meet and things to learn in the wonderful realm of IC.

suemac

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Sunday, August 20, 2006 - 02:17 pm:

Just another point Farid, as the triangle forms(I call this a pennant, but it's only semantics I suppose), if you draw the pennant as you see it forming and divide it vertically into thirds, if the price breaks out in the middle third of the pennant, the direction and strength of the breakout is more reliable and more likely to be sustained. As the price action progresses closer to the apex of the pennant, the strength of any breakout is less likely to be sustained.

Regards

Susan

Behold the turtle; he makes no progress unless he sticks his neck out!

007

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Sunday, August 20, 2006 - 02:39 pm:

Yes, excellent point suemac!

farid

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Sunday, August 20, 2006 - 04:46 pm:

Hi 007 and Susan
Thanks for your replys and kindness (007) .

So I found there is not any force that we must have a bottom touch after each top touch.Right?

007

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Tuesday, August 22, 2006 - 09:48 am:

Hi Farid,

No, you don’t necessarily have to have a bottom touch after each top touch. If you look at Stickman’s examples you'll notice that minor peaks and troughs will sometimes fall short of the trendlines, this is fine.

However, there will be times when you'll come across a chart with price action very similar to that found in your drawing, which can form snugly within the confines of a symmetrical triangle, that does not necessarily constitute a symmetrical triangle. Does that make sense?

The best way to train your eyes to see symmetrical triangles is to visit web sites and print out the examples that the experts give on those sites. Make a collection of all the different examples you come across. Eventually you'll be able to tell the difference between real and fake.

Regards

wombat40

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Tuesday, August 22, 2006 - 09:52 pm:

just one question...with the triangles posted above..what is the stop loss point used in such triangles...if using the breakout for entry

007

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Tuesday, August 22, 2006 - 11:09 pm:

Wombat 40,

I don't want to sound like a know-it-all (I'm really quite dull), but if long, I generally place my stops below either the lower trend line of the triangle or below the most recent minor trough to form prior to the breakout, whichever is closer to the breakout point.

Regards

(Message edited by 007 on August 22, 2006)

elisabeth

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Wednesday, August 23, 2006 - 05:17 am:

When setting your stop below the last trough or just outside the trendline, be sure to leave a bit of room - these are common stop points and master traders play them regularly with stop loss raids. There are plenty of "false break" examples in the market.

Elisabeth

farid

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Tuesday, August 22, 2006 - 07:31 pm: