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Symmetrical triangles are a popular chart pattern because they appear often and perform
reasonably well in a bull market. This opinion is based not on the performance rank, which is mediocre, but on trading
experience. For more information see pages 748 to 764 of the book
Encyclopedia of Chart Patterns, Second Edition and the following...
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 Symmetrical triangle chart pattern
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Score your chart pattern for
performance by clicking
here |
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Important Bull Market Results
Overall performance rank for up/down breakouts (1 is best): 16 out of
23; 15 out of 21
Break even failure rate for up/down breakouts: 9%; 13%
Average rise/decline: 31%; 17%
Throwback/pullback rate: 37%; 59%
Percentage meeting price target for up/down breakouts: 66%; 48%
Identification Guidelines
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Characteristic |
Discussion |
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Price trend |
Can be any direction leading
to the chart pattern. |
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Shape |
Triangular. Prices move between
two converging trendlines. |
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Trendlines |
Two trendlines bound prices;
the bottom trendline slopes up and the top one slopes down. |
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Crossing |
Price must cross the pattern
from side to side, filling the triangle with price movement, not white space. |
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Touches |
Price must touch each trendline
at least twice, forming distinct valleys and peaks. |
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Volume |
Trends downward 86% of the
time. |
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Breakout |
Upward 54% of the time and
75% of the way to the triangle apex (upward breakout) and 73% of the way for downward breakouts. |
Trading Tips
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Trading Tactic |
Explanation |
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Measure rule |
Compute the height from the highest peak (point
A in The Measure Rule figure to the right) to the
lowest valley in the pattern (B) then multiply it by
the above “percentage meeting price target.”
Add it (upward breakouts) or subtract it (downward breakouts) from the breakout
price. The breakout price is the point at which price pierces the trendline. The
figure shows an upward breakout with target price C.
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Breakout volume |
Patterns with heavy breakout
volume (above the 30-day average) do better. |
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Yearly low |
Triangles with breakouts within
a third of the yearly low : perform best. |
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Trend start |
Triangles perform best postbreakout
when they appear at the start of trends. |
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Throwbacks and pullbacks |
Throwbacks and pullbacks hurt postbreakout
performance. |
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 The Measure Rule
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Example
The above figure shows an example of a symmetrical triangle chart pattern. The consolidation pattern of the
symmetrical triangle forms as volume recedes. Then, price breaks out downward but within a few days, price
reverses and shoots out the top of the symmetrical triangle, busting the pattern and leading to a strong move upward.
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