What it looks like
A falling line through at least two lower highs and a rising line through at least two higher lows, converging to the right. The pattern completes when a candle closes below the rising line of lows. Measure the height at the widest part, from the first high to the first low.
What it means
The market squeezed until one side had to give, and it gave downwards. With no side clearly winning before the break, many breaks fail, so a retest from below that fails to get back inside is a stronger sign that sellers have taken control.
How to trade it
- 1
Draw the falling line of highs and the rising line of lows.
- 2
Confirmation: a candle closes below the line of lows, then price retests it from below and fails.
- 3
Entry: sell as the retest holds below the line.
- 4
Stop: on the other side of the triangle, above the falling line of highs. Example on US30: widest height 400 points, break at 46,900, retest fails at 46,910. Sell at 46,890, stop at 47,050, a 160 point risk.
- 5
Target: the widest height (400 points) below the break, about 46,500.
A close back inside the triangle.
Where it works best
When the triangle forms during a downtrend on 1 hour to daily charts, so the break agrees with the larger move.
WickSpeak finds symmetrical triangle breakdowns automatically and labels them on the candles that made them. Each note covers what it is, how to trade it and that a close back inside the triangle proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Selling the first poke below the line without a close.
- Ignoring the bigger trend; breakdowns against a strong uptrend often fail.
- Trading a break right at the tip, where moves tend to be weak.
Related patterns
Questions traders ask
How do you trade a symmetrical triangle breakdown?
Wait for a close below the rising line of lows, ideally a retest that fails, then sell with the stop on the other side of the triangle.
Are false breakdowns common?
Yes, they are common in symmetrical triangles because the squeeze is balanced. That is why a retest entry is safer than chasing the first break.
What is the target?
The height at the widest part of the triangle, measured down from the breakdown point.
What cancels the breakdown?
A close back inside the triangle. The squeeze has not been resolved downwards after all.