🌋 Predict Price Explosions With Triangles.
Have you already been surprised by a huge price move? A breakout?
Here’s how to predict them with triangles:
A triangle is a chart figure that always ends with a breakout. A big price move that — if correctly anticipated — can ensure quick profits.
A triangle forms when two trend lines cross.
As the price bounces between two trend lines, the gap between them narrows. Volatility drops.
And, what can occur when volatility’s low? A breakout! The lower the volatility, the bigger the breakout. Breakouts occur near the end of the triangles.
To trade breakouts, I place my long orders a bit above the end of the triangle and my short ones a bit below its end.
This way, when a breakout occurs, I’m sure to be in!
There are many platforms to place that kind of orders. I use Kaktana as I’m sure of its reliability (I coded it after all). Choose your own; it doesn’t matter.
But: how do you anticipate the direction of the breakout?
It’s simple! A triangle is a continuation pattern. It implies that the trend will stay the same before and after the triangle.
Therefore, descending triangles tend to break on their downside.
For instance, here’s a famous one: Bitcoin’s drop from the $6000 level.
Near the end of the triangle, volatility decreased.
On the breakout of the $6000 support, the priced dipped to $3100 (-50%).
That’s why triangles are so important!
In the same way, ascending triangles tend to break on their upside.
However, you can’t reliably tell on which side a symmetrical triangle will break. Anticipate both cases! 😉
You now know everything about triangles. I hope you’ll make good use of this knowledge! Don’t hesitate to send me an email if you want to teach me something.
Alex Toussaint - firstname.lastname@example.org
I'm the co-founder of Kaktana. Kaktana makes it simple to build automated technical-analysis strategies on crypto markets.
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