|
Profitable
Pattern Number One
The Symmetrical Triangle: A Reliable Workhorse
You’ll recognize the symmetrical triangle
pattern when you see a stock’s price vacillating up
and down and converging towards a single point. Its back and
forth oscillations will become smaller and smaller until the
stock reaches a critical price, breaks out of the pattern,
and moves drastically up or down.
The
symmetrical triangle pattern is formed when investors are
unsure of a stock’s value. Once the pattern is broken,
investors jump on the bandwagon, shooting the stock price
north or south.
 |
Symmetrical Triangle Pattern
To form your symmetrical triangle pattern, draw two converging
trendlines that bound the high and low prices. Your trendlines
should form (you guessed it) a symmetrical triangle, lying
on its side. |
How to Profit from Symmetrical Triangles
Symmetrical triangles are very reliable. You can profit from
upwards or downwards breakouts. You’ll learn more about
how to earn from downtrends when we talk about maximizing
profits.
If you see a symmetrical triangle forming, watch it closely.
The sooner you catch the breakout, the more money you stand
to make.
Watch For:
• Sideways movement, a period of rest,
before the breakout.
• Price of the asset traveling between two converging
trendlines.
• Breakout ¾ of the way to the apex.
Set Your Target Price:
As with all patterns, knowing when to get out is as important
as knowing when to get in. Your target price is the safest
time to sell, even if it looks like the trend may be continuing.
For symmetrical triangles, sell your stock at a target price
of:
• Entry price plus the pattern’s height for
an upward breakout.
• Entry price minus the pattern’s height for
a downward breakout.
ChartAdvisor Symmetrical Triangles in Action
ChartAdvisor has a long history of identifying symmetrical
triangle patterns. Over the last two and one-half years,
ChartAdvisor has brought to its readers over 20 symmetrical
triangle patterns. That’s an average
of one every month and a half.
Our readers earned an amazing 40% profit on our Nortel Networks Inc (NT) pick. Those who followed
our call on Rochester Medical Corp (ROCM) in September
of 2004 earned 15% in 33 days. And in October of 2004, our
members earn 11% in 19 days when ChartAdvisor noticed Pan
American Silver Corp (PAAS).
|
•