Symmetrical Triangle

-Symmetrical Triangle is a pattern which is formed within a upward & downward sloping trendline that are converging.

-It is also termed as coil or compressing spring.

-Atleast two touches on both the trendlines are needed for a complete pattern.

Why is it called a compressing spring pattern?

-During the formation, prices accumulate within a tight range as if someone is compressing a spring.

-As the price breakout, a sharp bounce is seen equivalent to when someone let go off a compressing spring.

Best Pattern :

-Decreasing volume while the pattern is formed

-Pullback (downtrend) or throwback (uptrend) is seen after a breakout

-High volume on a breakout

-Shorter the pattern, higher its validity

Below is the 15 minutes chart of Nifty Bank Futures

How to calculate target :

1. Specific Target (Left Side)

2. Trailing Stop Loss (Right Side)

How to trade the pattern :

-I prefer the pattern to form completely & give a decisive breakout

-Stop loss is taken as the starting of either of the trendline depending on the breakout

Below is a 15 mins chart of Nifty Spot

What can go wrong :

-False breakouts

Patterns will not be always correct. Respect your stop losses to protect your capital.

Happy trading!