Forex Basic Strategies

Trading The ‘Symmetrical Triangle’ Chart Pattern Using SMA


A Symmetrical Triangle is one of the most reliable chart patterns in the market. This pattern is characterized by converging two trend lines, which are drawn by connecting a series of peaks and troughs. The Symmetrical Triangle pattern is made up of price fluctuations where each swings high and swing low makes lower highs and higher lows. Essentially, the coiling movement of price action creates the structure of a Symmetrical Triangle. When the triangle is forming on the price chart, it indicates that neither the sellers nor the buyers are pushing the price far enough to create a clear uptrend or downtrend.

This pattern is also known as the ‘coil’ because, most of the time, it forms in a continuation phase. Symmetrical Triangle pattern consists of at least two lower highs and two lower lows. So when these points are connected, the lines converge, and the Symmetrical Triangle takes shape. A part of the trading community believes that if this pattern is formed in an uptrend, the price will break upward. Likewise, if the pattern forms in a downtrend, the price action will break downward. However, these are just assumptions and are not entirely true.

The reason for the formation of the Symmetrical Triangle on the price chart is because of the lack of volume and price movement in any underlying currency pair. This eventually results in the formation of a coiling pattern. Hence it is merely impossible to find out which side of the pattern will breakout.  The only way to trade this pattern is to let the breakout happen on any of the sides and take the trade only after confirmations.

Symmetrical Triangle Chart Pattern – Trading Strategies

Conventional Way – Buy Example

Step 1 - Identifying The Pattern

We can see the formation of a Symmetrical Triangle pattern in the below GBP/NZD Forex pair. We can observe the market coiling and not moving in any certain direction, which eventually resulted in this pattern.

Step 2 - Entry, Stop-Loss & Take-Profit

In the below chart, we had taken the entry when the price action broke the upper trend line. This pattern is pretty reliable but needs a lot of patience as the only way to trade is by stalking the charts. We can notice the market blasting to the north immediately after the breakout of the upper trend line. The stop-loss is placed just below the lower trend line, and the take-profit is placed at the higher timeframe’s resistance area.

Conventional Way – Sell Example

Step 1 - Identifying The Pattern

The formation of the Symmetrical Triangle pattern can be seen in the below AUD/JPY Forex pair. The market was in an overall downtrend, but from 28th – 30th January, it turned into a consolidation phase, which resulted in the formation of this pattern.

Step 2 - Entry, Stop-Loss & Take-Profit

However, on 30th Jan, the lower trend line was broken, indicating a sell signal in the AUD/JPY Forex pair. The entry can be right after the breakage of the lower trend line if you are an aggressive trader. But for conservative traders, it is recommended to watch for the bearish confirmation candles and then take the trade.

Here, we have gone for two targets. The first one was at the recent low, and the second target was a bit deeper, which is at the higher timeframe’s support area. If you are an intraday trader, then the TP1 is a good location for you to close your position. But if you are a swing trader, TP2 is the best match. Most of the time, the breakout trades do perform, and that is the reason for us to use the recent higher low as an appropriate stop-loss placement.

Symmetrical triangle + Simple Moving Average

In this strategy, we have paired the Symmetrical Triangle pattern with Simple Moving Average to identify accurate trading signals. SMA is a technical indicator used by almost every technical trader to identify the market trend. A smaller period average reacts more to the price action, whereas the larger period tends to respond less. If the SMA is below the price action, it means that the trend is up, and if it is above the price action, it indicates a bearish trend.

Step 1 - Identifying The Pattern & Plotting SMA On To The Price Chart

We can observe the formation of a Symmetrical triangle pattern on the EUR/NZD Forex chart.

Step 2 - Knowing What Not To Do

One of the most common ways of trading the Symmetrical Triangle and SMA is to let the price action go above or below the MA line to take an entry. But that approach is riskier, and let’s see why. In the below image, we have marked two circles where the MA generates both buy & sell signal. It is clear that the selling signal failed to perform, and the price action goes above the SMA. When the price broke the SMA, some traders might have taken buy entries, but that’s an immature way to trade this pattern. The reason for the formation of the Symmetrical Triangle is due to the lack of volume or price movement. So there is no way to know which side of this pattern will break.

Step 3 - Entry, Stop-Loss & Take-Profit

The correct way to trade the Symmetrical Triangle pattern is to use both of the trading tools in conjunction with each other. When the SMA goes below the price action, it confirms that the prices are more likely to break upside. When strong buyers break the Symmetrical Triangle with strong power, it’s a clear indication for us to go long. So we have entered the market right after the price broke above the upper trend line of the pattern.

If you are a confirmation trader, we recommend you wait for the price action to hold above the Symmetrical Triangle to take a ‘buy’ entry. For this particular strategy, we placed the stop-loss below the SMA, and take-profit was at the higher timeframe’s resistance area. After our entry, we can see the buyers blasting to the north, and we end up milking 100+ pips in this Forex pair.


The Symmetrical Triangle pattern is widely used among traders. The difficult part of trading this pattern is predicting the direction of the breakout. All we can do is to watch the charts until the breakout happens and anticipate the trade. The traditional way to book the profit is at the beginning of the triangle itself. However, we can use some other approaches such as higher timeframe’s S&R areas, supply-demand zones, or exiting the position when the market turns into a consolidation phase.

We hope you had a good read. Let us know if you have any questions in the comments below, and we would love to answer them. Happy Trading.

Forex Basic Strategies

Most Profitable Ways To Trade The Triple Top Chart Pattern


The Triple Top is a bearish reversal pattern that helps traders in identifying the peak areas of the market. This pattern occurs when the market prints three consecutive tops nearly at the same price level of any underlying asset. The areas of the touchpoints are the resistance levels, and the pullback between these points is known as the swing lows. After the third high or third touchpoint, if the price breaks the support and goes below, the pattern is said to be complete.

Traders can then activate their positions on the sell-side. Most of the traders try to be extra conservative and wait for the exact pattern to occur. But it can be challenging to find the Triple Top Reversal pattern with all the three highs at the same in size. We should always remember that the technical analysis is more of art and less of science. So even if 80% of the pattern rules are met, we can take the trades by confirming those signals with other credible technical indicators.

The Psychology behind the Triple Top Pattern

The appearance of a Triple Top Pattern implies that the buyers are slowly losing momentum in the market. It might also mean that the buyers are not willing to push the price higher. At the same time, the sellers are interested in taking the price lower. The Triple Top pattern is a way more powerful pattern than most of the other credible patterns in the market. This is because the third failed attempt of the buyers implies that the sellers are way too aggressive than the buyers. Hence we can expect stronger downward moves.

Triple Top Pattern – Trading strategy

The Triple Top pattern occurs very rarely on the higher timeframe. Even if it occurs, this pattern often takes a lot of time to develop fully. However, on an intraday timeframe, this pattern can be observed quite often.
Step 1: Identifying the TTP on a price chart

In the below AUDCHF Forex chart, we can see the market printing a clear Triple Top chart pattern.

Step 2: Entry 

The strategy is to wait for the breakdown to happen so that we can activate our short positions. On the 27th of January, we can observe the breakdown that occurred in this pair, and that can be considered as a clear Sell Signal.

Step 3: Stop-loss & Take Profit

We can activate our sell positions as soon as we see a bearish confirmation candle. We can go for two different targets in this trade. Both are at the higher timeframe’s support area. Most of the traders believe that their target must be double as compared to the size of the Triple Top pattern, but it’s just a myth. Always book the profit according to the market circumstances.

If the trend is super strong, go for the deeper targets. Contrarily, if the market momentum is fading, book the profit at any significant area. Traders who are well versed with pattern trading can add positions when the market goes back to the entry point so that they can ride the whole show again. While trading the breakout or break down patterns, always place the stop-loss near the recent low.

Triple Top Pattern + Double Moving Average

In this strategy, we have paired the Triple Top pattern with the Double Moving Average to identify accurate sell signals. A moving average will help us in identifying significant trends, trading opportunities, and entry/exit levels. Many traders believe that if they find the magic number of the period, then they can easily beat the market, but it’s not true. There are infinite numbers of periods available, and traders should practice only 3 to 4 periods, to use this indicator effectively.

Step 1: Identifying the TTP on a price chart

In the below chart, we can observe the market printing the Triple Top pattern on the NZD/JPY 60-minute Forex pair. We have applied the double MAs on to the price chart.

The traditional way to trade this pattern is to wait for the break down to happen and then go for sell just like we did in the above example. But in this strategy, let’s tweak things a bit by adding the double moving average to the plot. In this strategy, we are using the 14 and 9-period average. This strategy is purely for the intraday traders only.

Step 2: Entry, Stop-loss & Take Profit

After price action printing the third top, if we observe an MA crossover happening, we can activate our sell positions even before the breakdown. By following this approach, we get to enter the trade ahead of time, while the breakdown traders wait for the break down to activate their position. Most of the professional traders use this approach to maximize their profits.

There are many ways to close our positions. We can book profit at a significant support area. The placement of stop-loss depends on the trader’s trading style. If you are an aggressive trader, the smaller stop-loss is good. But expect more hits before the trade performs. If you are a conservative trader, use an extra spacious stop-loss.

Bottom line

A pattern is said to be paramount when it offers the best risk-reward ratio trades. Also, the pattern must have a higher probability of occurring in intraday timeframes. The Triple Top is one such pattern that offers both of these demands to every trader. Also, remember that the Triple Top is a bearish reversal pattern, so only take short positions when you see this pattern on the price charts. Apart from the ones mentioned above, there are different other ways to activate our position in the appearance of this pattern. But the above ones are the safest and most profitable ways to trade.

Try identifying and trading this pattern on a demo account before trading on the live charts. We hope you find this article informative. If you have any questions, please let us know in the comments below. Happy Trading.

Chart Patterns

Chart Patterns: Wedge Patterns

Wedge Patterns

I want to stress, again, that the frequency and positive expectancy of patterns in technical analysis will vary from market to market. Most of the literature is written for the stock market, which is an overwhelmingly long-biased market. So, bullish patterns perform much better than bearish patterns in the stock market. I don’t have any real statistics to reference other than my years of trading experience. It has been my experience that wedge patterns are one of the most profitable setups in the forex market.

Wedges look like (and in fact, are) extended triangles. Wedges are made of two trend lines that are drawn just like a triangle. The difference between wedge patterns and triangle patterns is simple: the trendlines in a wedge pattern point in the same direction. Ascending triangles have flat tops and a rising bottom. Descending triangles have flat bottoms with declining tops. Symmetrical triangles have a downtrend line and an uptrend line. Wedges are different. Rising wedges have a trendline both above and below price sloping up. Falling wedges have a trendline both above and below, but sloping down. Depending on the technical analysis material you read, you will see wedges that may look like channels, and that is fine – many do.

Wedge patterns should tell you one thing: the end is coming. Because wedges have two trendlines that point in the same direction, the slope of the move is often extreme and is indicative of a climax move. These are incredibly profitable and favorable patterns when you spot them – and they are horrible to trade against if you are trading inside of them. If you read Bulkowski’s work, you’ll know that he recommends at the trendlines in a wedge should be touched at least five times in order for the wedge pattern to authentic. This is true in the stock market as well as in the forex market.


Rising Wedge

Rising Wedge
Rising Wedge

You might think that a rising wedge pattern shows up at the top of a trend, and it often does. But you will also find the rising wedge appear at the bottom of a trend. When you see the rising wedge appear after a prolonged downtrend, be careful! The rising wedge that forms after a long bear move is often a continuation pattern. An easy way to think of the rising wedge is that it is an overwhelmingly bearish pattern. It doesn’t matter where it shows up in any trend – it is an extremely bearish pattern.

When I am trading the rising wedge, I generally take the initial breakout that moves below the second to last test of the bottom trendline. The example above shows that there is no immediate retest of the breakout lower. Retests do happen, but they are less frequent than what we see in the ascending, descending and symmetrical triangles.


Falling Wedge

Falling Wedge
Falling Wedge

The inverse of the rising wedge pattern is the falling wedge pattern. It can show up at either the end of an uptrend or a downtrend. If you see a falling wedge that occurs at the top of an uptrend, then you could we witnessing a false breakdown lower and see a resumption of the prior bull move. If you see the falling wedge at the end of a downtrend, then you can expect a swift reversal or deep throwback. Just like the rising wedge, the falling wedge is heavily biased towards one direction: overwhelmingly bullish.

On the image above, I’ve added an Impulse Wave to show how you can use Elliot Waves to help determine whether or not a wedge pattern is valid. Remember: Bulkowski said that that a wedge pattern is only confirmed when the trendlines have been tested at least five times. Another condition on the chart above that we didn’t see on the falling wedge is the attempted retest of the break. Again, retests are common in all patterns, but they are definitely less frequent with wedge patterns – that has been my experience with them in forex markets.

When trading the falling wedge, I like to enter when price moves above the second to last swing high. On the chart above, the entry would be above wave four.



Kirkpatrick, C. D., & Dahlquist, J. R. (2016). Technical analysis: the complete resource for financial market technicians. Upper Saddle River: Financial Times/Prentice Hall.

Bulkowski, T. N. (2013). Visual guide to chart patterns. New York, NY: Bloomberg Press.

Bulkowski, T. N. (2008). Encyclopedia of candlestick charts. Hoboken, NJ: J. Wiley & Sons.

Bulkowski, T. N. (2002). Trading classic chart patterns. New York: Wiley.