Triangle Chart Patterns Are Most Traded on the Forex Charts. Patterns can be used as a technical indicator in technical analysis for forex trading.

3. Triangle chart patterns are the most traded
chart pattern in currency trading. There are
three types of triangles most traded in
currency trading:

4. 1. symmetrical triangles
2. ascending triangles
3. descending triangles

6. Identifying triangle chart patterns is easy when a complete
technical analysis has been carried out. Locate 2 higher
highs and 2 lower lows. Next, draw a line through them.
Join at least 2 lower lows with one line, and 2 higher highs
with another line, and you’ll have a nice triangle chart
pattern. You have just identified a trade-able chart
patterns most traded in forex trading.
A minimum of four ‘bounces’ should be observed before
this triangle formation can be considered a reliable pattern
to trade with.

7. Research by Thomas Bulkowski and many famous
technicians indicate that price often breaks out of the
symmetrical triangle ahead of the price at which the 2
trendlines converge, which is labelled the apex.
From the point where the triangle begins, research
shows that most triangles break out of either the upper or
lower trendline anywhere from the 66 percent and 75
percent of the way to the apex, though some triangles
break out at the apex.

8. There is one major caveat to know when
working with triangle chart patterns. In most
technical analysis books, it is found that
ascending triangles are described as bullish
continuation patterns and descending triangles
are described as bearish continuation patterns.
From our experience, if you classify triangle chart
patterns as such, you are doing a disservice to
yourself.

9. Ultimately, we should not try to predict which
direction price will break from triangle chart
patterns. That’s not to say that ascending
triangles cannot meet their upside breakout
targets or that descending triangles will not break
to the downside targets. They do.

10. However, when thinking of these triangle
chart patterns in terms of risk/reward and
edge, it’s best to treat them without
directional bias and take advantage of the
principle of range expansion following range
contraction instead of the complexity of trying
to predict which direction price will break-out.

11. In fact, you will likely find that some of the best trades
will come from triangle chart patterns that break opposite of
their expected directional bias.
This is because traders who think that ascending triangles
will -always break to the upside will be forced to sell their
forex contracts as they stop-out when the ascending triangle
breaks unexpectedly to the downside, and these traders
stoping out, when combined with sellers entering new short-
sale positions as a result of the confirmed triangle chart
pattern entry will create a positive feedback loop that propels
price to achieve the unexpected downside target. Knowing
this is a major benefit when anticipating where or how to
enter a potential triangle trade.

12. • As such, we should use trendline-break EA found
on MT4 to draw not just a buy pending order on a
ascending triangle chart pattern, but also sell a
pending order on the chart pattern as well.
• When breakout happens either to the upside or
downside, the trader can participate on the
breakout regardless of its direction. This process
of placing buy and sell pending orders on triangle
chart patterns can now be automated by
commercialized software or robots.

13. In regard to where are best to enter trades in triangle
chart patterns, we turn back to conservative versus
aggressive tactics.
An aggressive trader would put on a position
immediately as price begins to break above the upper
trendline or beneath the lower trendline without waiting
for further confirmation signal.
Conservative traders have a variety of entry strategies,
including entering only as price breaks above a strong
bullish breakout candle like a bullish engulfing or beneath a
strong bearish candle.

14. Thanks to technology, there are
commercial robots programmed specially for
traders to trade triangle chart patterns on
automation. Whether the trader trades
aggressively or conservatively, entry based on
trendline-breakout or price breaks and closes
beyond trend line, each of these style of
trading can be personalized and programmed
to work in the absence of the trader at the
computer screen.

15. A time filter can be introduced to reduce the
possibility of false triangle break-outs outside the
specified trading time frame. Generally, most
genuine breakouts happen during active Forex
trading hours and 30 minutes after the opening
bell of the market session.

16. Another way is to introduce indicators
like ADX and to factor in the ADX values before
considering whether to trade breakouts or to
fade breakouts. Reducing the likelihood of the
false breakout, I will like to see that the ADX is
below 15 value for some time.
And the longer it stays below 15, it will mean
that market is attempting and preparing for a big
movement. It will be a very good opportunity to
trade triangle chart patterns.

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