What it looks like
A falling line through at least two lower highs and a rising line through at least two higher lows, meeting to the right like a sideways cone. The pattern completes when a candle closes above the falling line of highs. The height is measured at the widest part, from the first high to the first low.
What it means
Neither side was in control, so each swing got smaller until the range squeezed shut. One side had to give, and on this break it gave upwards. Because the squeeze is balanced, false breaks are common, which is why waiting for a retest that holds gives a better read of whether buyers are really in charge.
How to trade it
- 1
Draw the falling line of highs and the rising line of lows.
- 2
Confirmation: a candle closes above the line of highs, then price retests it and holds.
- 3
Entry: buy as the retest holds.
- 4
Stop: on the other side of the triangle, below the rising line of lows. Example on gold: widest height 40 points, break at 4,045, retest holds at 4,043. Buy at 4,046, stop at 4,030, a 16 point risk.
- 5
Target: the widest height (40 points) from the break, about 4,085.
A close back inside the triangle.
Where it works best
When the triangle forms during an uptrend on 1 hour to daily charts, so the break goes with the bigger move.
WickSpeak finds symmetrical triangle breakouts automatically and names them on the candles that made them. The note explains 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
- Buying the first poke above the line without waiting for a close or retest.
- Drawing lines through too few touches.
- Trading the break near the tip, where the squeeze has gone on too long and moves often fizzle.
Related patterns
Questions traders ask
Is a symmetrical triangle bullish or bearish?
Neither until it breaks. It is a squeeze with no side in charge, and the direction of the close outside the lines decides it.
Why wait for a retest?
False breaks are common in symmetrical triangles. A retest of the broken line that holds shows the breakout has buyers behind it.
How is the target measured?
Take the height at the widest part of the triangle and add it to the breakout point.
What is the difference from a pennant?
A pennant is a small symmetrical triangle that follows a sharp pole. A symmetrical triangle can form anywhere and is usually larger.