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 one. A breakout to the upside then occurred in late Dec'07.

There are other essential factors to consider when we are trading triangle patterns. The best triangle should last from a minimum of one month to a maximum of 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 or bearish if the price gaps up or down in the breakout. In this article we have discussed the 3 types of price patterns known as 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 a triangle pattern to last should be typically between one month and 3 months