A symmetrical triangle forms when the price makes lower highs and higher lows, converging into a point. This creates a triangle shape, with the support and resistance lines sloping towards each other.
The pattern suggests that neither the bulls nor the bears are in control, and the market is in a period of consolidation.
Implication:
Symmetrical triangles are generally considered neutral. A breakout can occur in either direction, depending on the prevailing trend.
Trading Strategy:
Traders wait for the price to break out of the triangle, either above resistance or below support.
Entry Point: Place a buy order above the upper trendline or a sell order below the lower trendline.
Target: The expected price movement after a breakout is approximately the height of the triangle at its widest point, added or subtracted from the breakout point.
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