Sunday, October 21, 2012

EUR/USD October 17, 2012 : Bullish Symmetrical Triangle Formation

The Symmetrical triangle formation pattern is a continuation pattern, that's mean the trend will continue in the same direction.
But how can i recognize the symmetrical triangle ? let's see .....
In this case the EUR/USD chart is in an uptrend making higher highs and higher lows but something strange (unusual) happened was that the lower high, so there were several possibilities:
1- The lower high followed by lower low, means the end of the daily scale uptrend and the beginning of the daily scale downtrend.
2- The lower high followed by higher low "like this case" means the conflict between the buying power and the selling pressure, i prefer to call it "the equality" between both the buyers and the sellers.

Then at this case "No.2" join the high with the lower high & join the low with the higher low, the output will be the triangle ribs which contains the price within it.

 If the price action break the upper boundary of the symmetrical triangle upwards "and this is the most probably" as the trend is up and the pattern is continuation, so buy or wait the declining of the price to retest the upper boundary of the triangle as a support then buy.

The target will be the vertical base price distance of the triangle, calculate it and then add it to the price at the breakthrough point of the upper boundary.

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