INVERSE TRIANGLE (FORMATION IN EXPANSION)
They are trend reversal patterns and usually cause an interesting turn in the price movement. What happens is that it is not a figure that appears frequently enough.
The structure is made up of a series of rising highs that are coupled with price cuts that also cause lows. There comes a time when the price is not able to bounce again, losing the lows and culminating the pattern.
As a general rule, the doctrine establishes that the ideal structure would be composed, at least, of three increasing ceilings and two decreasing floors, which justifies that this pattern is also known as a five-point turn.
The culmination of the pattern that would alert the technical analyst that a trend can be exhausted and another in the opposite direction can begin would be when the price loses the lower guideline formed by the floors, a fact that can be coupled with a pullback.
The volume is usually discontinuous, although it is generally high. To calculate the projection of the price movement once the pattern is completed, the maximum amplitude of the final part of the figure is taken and projected down from the area where the price breaks the lower guideline. In this way we will obtain the first objective of the new price impulse.
Finally, say that this chart formation occurs the vast majority of times in an uptrend.
They are trend reversal patterns and usually cause an interesting turn in the price movement. What happens is that it is not a figure that appears frequently enough.
The structure is made up of a series of rising highs that are coupled with price cuts that also cause lows. There comes a time when the price is not able to bounce again, losing the lows and culminating the pattern.
As a general rule, the doctrine establishes that the ideal structure would be composed, at least, of three increasing ceilings and two decreasing floors, which justifies that this pattern is also known as a five-point turn.
The culmination of the pattern that would alert the technical analyst that a trend can be exhausted and another in the opposite direction can begin would be when the price loses the lower guideline formed by the floors, a fact that can be coupled with a pullback.
The volume is usually discontinuous, although it is generally high. To calculate the projection of the price movement once the pattern is completed, the maximum amplitude of the final part of the figure is taken and projected down from the area where the price breaks the lower guideline. In this way we will obtain the first objective of the new price impulse.
Finally, say that this chart formation occurs the vast majority of times in an uptrend.