Trading the Triangle Chart Pattern in Silver
Trading the different type’s triangle chart pattern in silver is extremely profitable. During the initial formation of the triangle pattern, the price is traded with a wide range. As the pattern starts to develop gradually the triangle support level and resistance levels becomes narrower. Basically, there are three major types of triangle pattern that professional day trader use.
- Ascending triangle pattern or the bullish chart pattern
- Descending triangle pattern or the bearish chart pattern
- Symmetrical triangle pattern
In the below figure, the professional traders spotted a symmetric triangle pattern in the silver chart. They wait patiently for the chart pattern to complete its formation. With the course of time, the price start to trade in an arrow region which indicates the possible breakout is near. Breakout of the price can be established in any direction of the symmetric triangle chart pattern.
Figure: Trading the symmetric triangle pattern in silver
In the above figure, the breakout occurred in the upward direction. Traders will enter into their long trade just after the strong bullish candle. They set their potential stop loss just below the triangle support zone for the bullish breakout. The other two triangle pattern is the ascending triangle pattern and the descending triangle pattern. As the name suggest, the ascending triangle has a bullish breakout charters tics while the descending triangle has bearish breakout characteristics.
The current trend of the silver is very important while trading the triangle pattern. Statistics and research show that ninety percent of the breakout occurs in the direction the prevailing trend. So it’s imperative that trades take entry in the direction of the trend while trading the triangle pattern in silver. Though the system is very profit for day traders yet strict money management rules should be followed before taking the trade after the successful breakout.