Symmetrical Triangle Explained

To calculate the minimum price objective, calculate the "height" of the formation at its widest part - the "base" of the triangle.

The height is equal determined by projecting a vertical line from the first point of contact with the trend line on the left of the chart to the next point of contact with the opposite trend-line.

In other words, measure from the highest high point on one trend-line to the lowest low point on the opposite trend-line.

Symmetrical Triangle looks like a copy of the Classic ABCD Price Pattern.


Measuring the Triangle - To project the minimum short-term price objective of a triangle, an investor must wait until the price has broken through the trendline.

When the price breaks through the trendline, the investor then knows whether the pattern is a consolidation or a reversal formation.

To calculate the minimum price objective, calculate the "height" of the formation at its widest part - the "base" of the triangle.

The height is equal determined by projecting a vertical line from the first point of contact with the trendline on the left of the chart to the next point of contact with the opposite trendline.

In other words, measure from the highest high point on one trendline to the lowest low point on the opposite trendline.

Both these points will be located on the far left of the formation. Next, locate the "apex" of the triangle (the point where the trendlines converge).

Take the result of the measurement of the height of the triangle and add it to the price marked by the apex of the triangle if an upside breakout occurs and subtract it from the apex price if the triangle experiences a downside breakout.

For example, working with a symmetrical triangle, assume the highest high of the pattern occurs at 100 and the lowest low at 80.

The height of the pattern is 20 (100 - 80 = 20). The apex of the triangle occurs at 90.

The pattern has an upside breakout. Using the measuring rule, the target price is 110 (90 + 20 = 110).

Duration of the Triangle - As mentioned before, the triangle is a relatively short-term pattern.

It may take up to one month to form and it usually forms in less than three months.

Forecasting Implications - Once breakout occurs, the symmetrical triangle tends to be a reliable pattern.

Calculating the failure rates ranging between 2% and 6% for symmetrical triangles after a valid breakout.

Shape of Symmetrical Triangle - The pattern should display two highs and two lows, all touching the trendline - a minimum of four reversal points is necessary to draw the two converging trendlines.