This system is based on the symmetrical triangle that is considered to be a continuation pattern. This pattern indicates a consolidation in a trend and then resumes to its trend.
The Symmetrical Triangle pattern is an effective strategy for swing trades and it is formed by the 2 converging lines, these are the converging resistance and the ascending support line.
The symmetrical triangles are bullish when it forms after the uptrend and if it forms after a downtrend then it is bearish. The breakout can happen in the prior trend direction. This strategy is very profitable when you enter during the breakout.
In order for you to be successful in this pattern, you must know how to identify the symmetrical triangle when it forms and enter position right after the break of the triangle.
The two trendlines drawn in the formation of the triangle should have a similar slope at a point know as the apex.
The price will bounce between these trendlines towards the apex.
The breakout will usually happen on the 3/4 of the way towards the apex.
The breakout usually happens in the direction of the original or previous trend. Now, if you see a symmetrical triangle pattern formation after a downtrend, it is expected that the breakout will be below the ascending support line or if you see this pattern formation after an uptrend, expect a breakout on the descending resistance line. A break in the opposite direction of the prior trend indicates a formation of a new trend.
Candlestick must break and close above or below the triangle pattern.Wait and watch for a candlestick to breakout of the triangle pattern.
Place a buy stop or sell order 2-5 pips from the closing price of that candlestick.
Your profit target is the pattern height.
Place stop loss about 10-30 pips under the low of the candlestick that breaks the triangle chart formation or you can place it on the other side of the triangle. You can also place it on the halfway point between the descending and the ascending trendlines just right where the breakout happens.
Move stop loss to breakeven if you reached halfway towards hitting the target profit or you can trail the stop.
It can give you good profits if you catch the breakout.
No other indicators because this is more on price actions.
It can happen in all timeframes.
Open AUDUSD chart for template
How to install Symmetrical Triangle Pattern Forex Swing Trading Strategy?