A tale of two triangles

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
You really have to be careful when you see a new pattern forming because that pattern may simply be swallowed up by an even bigger pattern. As we can see here, there was a descending triangle that looked completely valid up until the point that it was invalidated. However, you'll notice it never actually broke through support. This is why it's important to take other factors into consideration and wait for technical confirmations. The bearish triangle was never confirmed, and now we are in the middle of an even larger bullish triangle still bouncing between support and resistance .

In this situation, the market was very oversold, so I was suspicious of the descending triangle although I still included it in my ideas. I just never actually traded on it and this is why. The conditions just weren't right. I am, however, trading this bullish triangle as the conditions for it are right.

UPDATE 21 Jan. 2015

Breakout confirmed! Despite the awkward drawing, this pattern appears to have served well once again.
+2 Reply
netixen MoonTrader
Yeah, it worked perfectly on bitfinex. We have to hit 238 before a new crossroad.

netixen MoonTrader
The question now is are we gonna move to my second target around $275, realising the full base height of the triangle or is the chart gonna form an ascending wedge and move back down.

*sigh* this idea has been invalidated
netixen MoonTrader
I usually look at bitfinex, and it hasn't been invalidated there.
netixen netixen
Or it is, depends if you want perfect triangles.
MoonTrader netixen
Yeah, I'm not giving up on the bulls yet, but I'm less confident now.
netixen MoonTrader
This was actually a confirmation for me.
I don't move my stops after I'm already in, but it's nice to get a confirm when I'm going early.

MoonTrader netixen
That's interesting. Perhaps I should have drawn it a bit differently.
MoonTrader MoonTrader
I actually do recommend moving your stops, though. Once we make a new higher low, it's a safe bet that a move below that low would invalidate the idea. Just a thought.
+2 Reply
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