More on Different Triangles.
Descending triangles are basically the opposite of ascending triangles.
Sellers are continuing to put pressure on the buyers, and as a result, we start to see lower highs met by a strong support level.
Descending triangles are generally bearish signals.
To take advantage of this, our goal is to position ourselves to go short if the price should break below the support level.
The third type of triangle is the symmetrical triangle.
Rather than having a horizontal support or resistance level, both the bulls and the bears create higher lows and lower highs and form an apex somewhere in the middle.
Unlike the ascending and descending triangles which are bullish and bearish signals, symmetrical triangles have NO directional bias.
You must be ready to trade a breakout on either side!
In the case of the symmetrical triangle, you want to position yourself to be ready for both an upside or downside breakout.
A perfect time to use the one-cancels-the-other (OCO) order!
Don’t remember what an OCO order is? Go review your types of orders!
In this scenario, GBP/USD broke out on the upside and it triggered our long entry.
To help you memorize the different types of triangle breakouts, just think of facial breakouts.
Ascending triangles usually break out to the upside.
So when you think of ascending triangles, think of breaking out on your forehead.
Descending triangles usually break out to the downside.
So when you think of descending triangles, think of breaking out on your chin.
Symmetrical triangles can break either to the upside or the downside.
So when you think of symmetrical triangles, think of breaking out on both your chin and forehead.
“Why do you keep staring at my pimples?!”
Here’s a quick and disgusting memory tickler:
Ascending triangle = Forehead breakout
Descending triangle = Chin breakout
Symmetrical triangle = Forehead OR chin breakout
But we bet you’ll remember it!
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