A blog site devoted to technical analysis and stock trading in the Philippine stock market.
Looks like a triangle? yup .. Shaped like a triangle? yup .. Is there a big triangle? yup .. Is there a small triangle? yup .. A potent high probability symmetrical triangle breakout pattern? NOT !!!! .. A shape by itself does not equate to a high probability pattern. For one to qualify as a continuation or reversal pattern in the context of technical analysis, certain parameters and conditions need to be met. An important condition is that for a pattern to be considered a valid unfolding triangle, both the upper and the lower converging lines must have been touched at least twice. In this case, the pattern could only have qualified as a triangle on 11/13/07 which was when the lower line was touched for the second time. Another parameter is that successful breaks of triangle patterns usually occur within 3/4 of the distance between the base and the projected apex. The farther beyond that point the breakout occurs, the lower the potency of the price move and the lower the probability of a breakout occurring. Another important condition is that a pattern is not complete until the price breaks out of the pattern .. Let's keep in mind that not all patterns are profitable .. so always remember to trade only high probability setups .. Cheers !
