A symmetric triangle is a chart pattern formed by two converging trendlines, where both the upper and lower trendlines slope in towards each other. This pattern signifies a period of consolidation in the market, where buyers and sellers are indecisive about the future direction of the price. As the price oscillates between these trendlines, the trading range gradually narrows, creating a triangle shape.
Symmetric triangles are characterized by decreasing trading volume as the pattern progresses, indicating diminishing volatility and potential for a breakout. Traders often anticipate a significant price movement following the breakout from the triangle pattern. However, the direction of the breakout is not predetermined, so traders typically wait for confirmation of the breakout by observing a decisive move beyond one of the trendlines accompanied by increased volume. Once the breakout occurs, traders may enter positions in the direction of the breakout, expecting a continuation of the new trend.
Symmetric triangles are characterized by decreasing trading volume as the pattern progresses, indicating diminishing volatility and potential for a breakout. Traders often anticipate a significant price movement following the breakout from the triangle pattern. However, the direction of the breakout is not predetermined, so traders typically wait for confirmation of the breakout by observing a decisive move beyond one of the trendlines accompanied by increased volume. Once the breakout occurs, traders may enter positions in the direction of the breakout, expecting a continuation of the new trend.