Sabtu, 10 Oktober 2009

Forex Chart Triangle Patterns

Many of the traders who use technical analysis to assist them in making a decision. At this time I want to discuss about the use and implications of the triangle pattern we often see in the world of trade.

The main reason why the triangular pattern is selected to identify the trading is
triangle pattern is relatively easy to understand or be understood in a trading chart.If we look carefully, this triangle pattern is formed of a price established by the action bound within two converging trend lines. Resistance to downward sloping line while support should be upward sloping line. Market price should be 'bouncing' between the two trend lines, alternate hitting the top and bottom of the 'triangle'. Minimum of four 'bounce' must be observed before the formation of this triangle can be regarded as a reliable pattern to trade with.

The triangle candlestick formation shows that there has been intense competition between buyers and sellers. This shows that they are very aggressive in the fight against one another, with the winners will be announced after losing the other hand buying / selling pressure.

This can help to identify this concept to the metal compression spring. Imagine yourself pressing the metal springs: a spring came under increasing pressure, becomes more difficult to push together. Once you let go of one side of the spring, he'll jump to the release.

This is similar to how the work triangle pattern formation in the Forex market. When prices fluctuate (or 'bounce') is less and less wild, it shows an increase of pressure buildup in the market. When either the buyer or seller to give way, the price tends to shoot another strong support (ie stronger) side.

The time is right to start trading with a triangle pattern is in the event of a violation either above or below the trend line before entering into the trade. Because no one would know in advance which party (ie buyer or seller) is stronger, many people prefer to let their actions show prices.

When prices close above the resistance line, they buy. If prices close below the support line, they sell.

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