The third way to identify breakthrough opportunities is through the triangle. When the market got rid of the volatile market and began to maintain a narrow range within a narrow range, a triangle was announced. Our goal is that when the market is consolidating, we can adjust the position accordingly so that when a breakout market occurs, we can seize the subsequent trend market.
There are three categories of triangle states:
- Ascending triangle
- Descending triangle
- Symmetrical triangle
When the price low continues to rise, but it is always difficult to break through the resistance of the upper pressure line, then an upward triangle is formed. The rising triangle signals us that the market bulls are gradually overtaking the bears.
The more information that the ascending triangle gives us is that every time the price hits a certain height, some traders believe that selling at that level, which in turn causes the price to fall from that level.
On the other hand, there are other traders who believe that the price should go higher, and as the price starts to fall, they will buy at a higher price than the previous low. As a result, the tug-of-war between the long and short sides will eventually end with the victory of one side.
Given that the ascending triangle usually sends a bullish signal, what we are looking for is an opportunity for an upward breakout. When we see the exchange rate break through the upper resistance level, the most reasonable decision should be to start long.
The running direction of the descending triangle is opposite to that of the rising triangle. The seller continued to put pressure on the buyer. As a result, we saw that the price high continued to decrease and formed a strong support level.
Ascending triangles usually show upward breakthroughs.
The downward triangle usually shows a downward breakthrough.
Both upward and downward breakthroughs are possible in a symmetrical triangle.
The descending triangle is usually bearish. Taking advantage of this, we can choose to go short when the price falls below the support level.
The third triangle state is a symmetrical triangle. Different from the resistance level formed by the rising triangle and the support level formed by the falling triangle, in the case of a symmetrical triangle, the market bulls and bears jointly force the price highs to continue to fall, and the lows to continue to rise, eventually causing the exchange rate to gather at the top of the middle .
Unlike rising triangles which are usually bullish and falling triangles which are usually bearish, hedging triangles do not have a clear direction preference. You should be prepared for the exchange rate to move up or down.
In the case of a symmetrical triangle, the most ideal way to make an order is to set up an optional commission order (OCO). I do not know what the OCO order means? Go back to the previous course to see the explanation about order types.