Symmetrical Triangle


DEFINITION of 'Symmetrical Triangle'

A chart pattern used in technical analysis that is easily recognized by the distinct shape created by two converging trendlines. The pattern is identified by drawing two trendlines that connect a series of sequentially lower peaks and a series of sequentially higher troughs. Both trendlines act as barriers that prevent the price from heading higher or lower, but once the price breaches one of these levels, a sharp movement often follows.

Symmetrical Triangle

BREAKING DOWN 'Symmetrical Triangle'

A symmetrical triangle is generally regarded as a period of consolidation before the price moves beyond one of the identified trendlines. A break below the lower trendline is used by technical traders to signal a move lower, while a break above the upper trendline signals the beginning of a move upward. As you can see from the chart above, technical traders use a sharp increase in volume or any other available technical indicator to confirm a breakout beyond one of the trendlines.

The sharp price movement that often follows a breakout of this formation can be captured by traders who are able to identify the pattern early enough.

  1. Consolidation

    In technical analysis, the movement of an asset's price within ...
  2. Triangle

    A technical analysis pattern created by drawing trendlines along ...
  3. Breakout

    A price movement through an identified level of support or resistance, ...
  4. Trendline

    A line that is drawn over pivot highs or under pivot lows to ...
  5. Continuation Pattern

    A technical analysis pattern that suggests a trend is exhibiting ...
  6. Breakout Trader

    A type of trader who uses technical analysis to find potential ...
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  1. How effective is creating trade entries after spotting a Symmetrical Triangle pattern?

    Trade entries created based on the symmetrical triangle pattern are usually very effective, since a decisive breakout to ... Read Full Answer >>
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    While both the symmetrical triangle and the pennant are continuation patterns with a good degree of reliability, there are ... Read Full Answer >>
  3. How are Symmetrical Triangle patterns interpreted by analysts and traders?

    Analysts and traders generally interpret the symmetrical triangle pattern as a continuation signal, but it can also herald ... Read Full Answer >>
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