Figure 3: symmetrical triangle example

As shown in figure 3, the price chart of HiapHoe shows converging lower highs and higher lows. While the ascending and descending triangle pattern dictate the market tone, where it is bullish and bearish respectively, symmetrical triangle dictates a balance between buyers and sellers. Hence it is only after a break to either side then only can we conclude whether it is trending higher or lower. From early Nov'07 to late Dec'07, we can see that every price rally is lower than the previous attempt and every price retracement ends up higher than the previous. A breakout to the upside then occurs in late Dec'07.

There are other essential factors to consider when we are trading triangle patterns. The best triangle is formed between one month to not more than three months. The volume should be drying up as the price trades towards the apex of the triangle. Upon breakout of the triangle pattern, volume should be significantly higher. It will be even more bullish if the price gaps up in the breakout. In this article we have discussed the 3 types of price patterns known as the triangles. Breakout of triangles should not be too close to the apex and that it should be accompanied with heavy volume. The time taken for the triangle pattern to form should be between one month to 3 months typically.