Using your chart let me show you something you may be missing. A symmetrical triangle we know is just a channel with converging lines. The bears and bulls are about equal in the pressures they are exerting. That is why the pattern forms. However, the pressure is also BUILDING on both sides. Price will not stay in this pattern. There WILL be a BO. It is 50/50 in either direction. UNLESS you look at the context within which the triangle has formed and the triangles location within the larger context.
Usually the BO will be in the direction of the larger context. But, we must also remember any BO will be followed by an attempt by the other side to make the BO fail. And often, the BO WILL fail and the triangle just becomes the final flag in a bear trend (in this case) jbefore a reversal takes place.
Ok ... look at this chart of yours with these concepts in mind. We can’t see all the context but the immediate context is a bear channel (I drew in the bottom channel line).
In this case the apex is at the top of the bear channel. The expected BO attempt would likely be south (converging patterns here...channel and triangle). So, to short is the higher probability trade. What is a logical PT? Somewhere in the bottom third of the channel.
Then what? Cover and reverse and go long. If I did so and the long position goes against me I would just add to the losing position. Why? BO’s out of a channel fail most of the time and price will go back into the channel. So, if I averaged down on the long I would exit around the middle of the channel. Why not the top for the exit? Because it is a bear channel so pressure is down and I wouldn’t try to capture alot of profit. If I went long at the bottom of the channel and did not need to average down and price reverses up I might hold and exit in the top third of the channel.
So what happened?
Price broke south out of Apex and traded into the bottom third (dashed blue lines) of the bear channel then reversed back up on that green bull bar into the top third of the channel and (even though you don’t show it in your chart) I suspect it went on up into the top third of the channel and maybe even further as the bulls pushed back against the BO of the triangle (trying to make it fail).
As mentioned earlier this is how I would trade this. My opinion only.
BOTTOM LINE: any pattern I am considering trading I want to see where it is or has formed at within the larger pattern and what type of pattern the larger pattern is. In addition, at times I will look at a smaller TF and a larger TF than the one I am placing trades in and which contains the pattern i am attempting to trade. Converging patterns can give a better edge. NOT EVERY SYMMETRICAL TRIANGLE IS EQUAL IN PRESSURES IN TERMS OF DIRECTIONAL MOVEMENT ALTHOUGH THE VERY TRIANGLE ITSELF IS EQUAL IN PRESSURES AND THAT IS WHY IT IS SYMMETRICAL. Maybe this will make sense or could be it just muddies the waters for some traders?? Anyways it is my opinion and how I would trade this. But I am a scalper and a discretional one at that.
