Lower highs and higher lows squeeze price into a symmetrical triangle. Neither side is winning, yet.
How to trade it
- Don't guess the direction. Wait for a close outside the triangle.
- Breakouts often follow the prior trend, but not always.
- Target = the height of the widest part of the triangle, projected from the break.
Pro tip
Breakouts that happen around two-thirds of the way to the tip tend to be cleaner than ones at the very tip.
Wick says
Buying "because it'll probably break up". It broke down. The triangle doesn't care what we think.
Key takeaways
- Converging trendlines, no clear winner.
- Trade the confirmed break, not your guess.
- Target = widest height of the triangle.