Part VII. Triangles. Commander in Pips: Today we will turn to discussion of a pattern that is widespread on the market – different types of triangles. Pipruit: Hmm, and what kind of triangles could there be? Commander in Pips: Well, there are three major types of triangles – symmetrical, ascending/descending triangle and broadening top/bottom. Although, in the classical school of technical analysis, triangles are treated mostly as continuation patterns, in the modern environment they become reversal as often as continuation. Also, the classical rules of triangles trading are well-known, so market-makers very often push the market to fake breakouts of triangles to grab the public’s stops. In general a triangle looks very similar to a wedge pattern, but the nature of a triangle not in just “exhausting” but more as “indecision”. Yes, very often triangles lead to continuation, but to reversals also, especially broadening top/bottom. Symmetrical triangles Symmetrical triangles usually have horizontal direction and an apex at the end of the pattern. The price action inside the triangle forms lower highs and higher lows with equal speed, or almost equal. It suggested that symmetrical triangles more often leaded to continuation of the previous trend rather than to reversal. But take a look at weekly EUR/USD chart – this is not a rule of thumb: Chart #1 EUR/USD Weekly – Reversal symmetrical triangle See – although this triangle could be treated as symmetrical, it has led to a reversal in the long-term trend on the Euro. Here you can clearly see lower highs and higher lows that have been formed by the price.