Triangle Profit Sniping

Steve Sollheiser
www.UniversalTradingProfits.com

The Asymmetric Triangle is also a highly reliable pattern, easy to identify and
trade.
It consists of two trendlines: One that is horizontal and one that is sloping,
converging into the horizontal one. Its interpretation is also very simple to
understand: Price is converging in a certain direction until its breakout in this
direction.

Do not confuse this pattern with the Symmetric Triangle which is more common,
but not profitable. Its signals are highly unstable, and it rarely reaches its
projected target even when trading a strong signal such as a pullback. Ignore the
Symmetric Triangle – you do not need it in your trading arsenal.

Illustration of the Asymmetric Triangle pattern:

Fig. 1: Illustration of the Asymmetric Triangle Pattern

The psychology behind the pattern

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Price is creating lower Highs, indicating that sellers are gaining power, while
buyers are staying flat. Eventually sellers win the battle and price breaks the
support level. It is a demonstration of one part of the market which is steadily
gaining power over the opposite, until a breakout takes place and the patterns
comes into effect.

This pattern is traded in 2 ways:

1. Trade after bounce from the trendline.

2. Pullback after breakout of the horizontal level.

Illustrations of trading zones:

Fig. 2: Trading zones in the Asymmetric Triangle

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Examples of trades:

Fig. 3: Two trades based on the Asymmetric Triangle. The two were on the sloped
trendline itself.

Fig. 4: Two trades based on the Asymmetric Triangle Chart Pattern. The first was a
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result of touch at the Resistance trendline – bounce – that was confirmed. The
second trade is a pullback of price to the Support level. Note that for both trades
the rules of Minimal Risk:Reward ratio is met (Target divided by Stop Loss is
greater than 1.5)

Fig. 5: Precise pullback entry after an Ascending Triangle pattern. Price pulled
back to the Resistance level and confirmed a trade after the bullish candle passed
the Bearish one. Note that target was not met in this trade. In these cases the
Trade Management techniques will make sure that profits are safe – more on this
issue in the next chapter.

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 Fig. 6: Very precise short entry after a pullback to Support horizontal line. Price
broke the triangle as predicted and pulled back to the support level. Pullback was
confirmed by candlesticks and short entry was issued.

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 Fig. 7: Pullback trade at the GBP\JPY currency pair. Even at highly volatile pairs
the patterns still provide leading trading signals.

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