Hello babypips!
I’m fairly new and I have been going over the school which is absolutely great. I had a confusion about triangles pattern though, as I read two different things listed below. Can someone clarify or is this really a mistake?
and
Thank you!
EDIT: For example, if you spot a descending triangle, you would expect bearish or bullish breakout? --> One saids bearish while the other says bullish
Hi,
I was wondering what makes you think that there is a mistake ? Would you state what the mistake is so we can better understand what you really mean ?
Hi sorry. If you read both, they are contradicting to each other.
For example, if you spot a descending triangle, you would expect bearish or bullish breakout? --> One saids bearish while the other says bullish
There is no mistake. In the article about Triangles there is :
Ascending Triangle:
“[B]Most of the time[/B], the price will in fact go up. The point we are trying to make is that [I]you should not be obsessed with which direction the price goes[/I], but you should be ready for movement in EITHER direction.”
In the second article about Breakouts, there is :
“What we are looking for is a breakout to the upside since ascending triangles are [U]generally[/U] bullish signals.”
This means that Most of the time the breakout happens to the upside, but sometimes the break out happens to the downside. One should be watch out for the movement in both direction.
In fact there is somewhat contradictory advice given on the subject of triangles. The breakout page says, for example, that an ascending triangle is bullish, where the triangles page says that an ascending triangle could go either way.
Then there is the notion that a rising pennant is bearish, where a falling pennant is bullish, but the difference between pennants and triangles is subtle, and may often be confused, and I have my doubts that pennants are actually reversal patterns in any case.
My opinion is that this shows just how subjective is technical analysis, and you will not find a consensus among all traders about just what certain patterns will produce for probabilities. AmineL’s advice to treat these with suspicion and assume they could go either way, is good, in my opinion.
I don’t think so.
The key paragraph is “The good news is that we don’t care where the price goes. We just know that it’s about to go somewhere. In this case, we would place entry orders above the upper line (the lower highs) and below the support line.”
And in my opinion, too.
Hi,
It is true pattern is sometimes could make you feel confuse.
First in my opinion that is likely the same like others opinion = Triangle could go both ways.
BUT, Remember that always check the statistic or the price chart before the triangle pattern to adjust with your trading strategy.
Second, If you already familiar enough with one trading strategy with good risk & reward result. The shape of the triangle and the price chart before the triangle pattern will decided which trade you will take.
There are no right or wrong in trading. it is just the matter of percentage.
If you got more money than you lose. than it is o.k