xjo weekend zoomba lounge, page-63

Hi Martis,

The received wisdom about symmetrical triangles is that they are continuation patterns.

"Edwards and Magee suggest that roughly 75% of symmetrical triangles are continuation patterns and the rest mark reversals. The reversal patterns can be especially difficult to analyze and often have false breakouts. Even so, we should not anticipate the direction of the breakout, but rather wait for it to happen. Further analysis should be applied to the breakout by looking for gaps, accelerated price movements, and volume for confirmation. Confirmation is especially important for upside breakouts."

Edwards and Magee wrote back in 1948. More recent research suggests that the pattern doesn't have that degree of reliability as a continuation pattern. In fact - it's closer to a coin toss.

Check out Bulkowski on Chart Patterns.

Redb