Triangle Pattern

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APPLICATION

The Triangle Pattern drawing tool allows users to visually identify potential Triangle chart patterns.

Triangles are a popular pattern that analysts frequently use to anticipate potential price reversals. The Triangle Pattern drawing tool allows you to plot four points (A, B, C, D) in order to overlay a triangle onto the candlesticks of a price chart. The idea is to place the points on four alternating highs and lows. That is to say, points A and C would be on consecutive highs (or lows) and B and D would be then be on consecutive lows (or highs).

There are a few different types of triangle patterns to look for. The main differentiation between the types of triangles is the angle between the consecutive high points in relation to the angle between the consecutive low points. That is to say, what direction does the AC line move in when compared to the movement of the BD line?

The three types of triangles

  • Symmetrical Triangle - Characterized by the convergence of a support line and a resistance line into a point (the apex). In a symmetrical triangle the slopes of the two lines should be similar and as close to identical as possible. Price will then bounce between support and resistance before finally breaking out at the end. Generally speaking, the symmetrical triangle is regarded as a continuation pattern. This means that if the triangle is preceded by an uptrend, when price finally breaks out, it will continue upwards. If preceded by a downtrend, the opposite is true. Of course no rule in trading is always true. If price breaks out in the opposite direction of the previous trend, it should be considered the start of a new trend altogether.
  • Ascending Triangle - A bullish triangle pattern characterized by the AC line forming a flat level of resistance and the BD line forming an ascending support line. Price will bounce back and forth between support and resistance levels before ultimately breaking out above the flat resistance line. There is also the possibility that price may break below the ascending support line therefore breaking the pattern. Because the breakout can be in the unexpected direction, it is usually advised to wait until breakout confirmation before entering a position. Trading in advance of a breakout can be dangerous.
  • Descending Triangle - A bearish triangle pattern characterized by the BD line forming a flat level of resistance and the AC line forming a descending support line. Price will bounce back and forth between support and resistance levels before ultimately breaking out below the flat resistance line. There is also the possibility that price may break above the descending support line therefore breaking the pattern. Because the breakout can be in the unexpected direction, it is usually advised to wait until breakout confirmation before entering a position. Trading in advance of a breakout can be dangerous.


HOW TO USE IN TRADINGVIEW

Style

TrianglePatternStyle.PNG

Border

Can change the color of the border as well as its thickness.

Text Options

Can change the text color, font type and font size. You can also choose to bold and/or italicize the text.

Coordinates

TrianglePatternCoordinates.PNG

Price 1

Allows for the precise placement of the pattern's first point (Price 1) using a bar number and price.

Price 2

Allows for the precise placement of the pattern's second point (Price 2) using a bar number and price.

Price 3

Allows for the precise placement of the pattern's third point (Price 3) using a bar number and price.

Price 4

Allows for the precise placement of the pattern's fourth point (Price 4) using a bar number and price.