Before we get to today’s topic: How To Day Trade and Swing Trade Triangles (one of my very favorite trading price patterns) …
I want to thank everyone who voted for Top Dog Trading in the Technical Analysis of Stocks and Commodities Magazine “Readers Choice Awards.”
This is an annual awards poll conducted by “Technical Analysis of Stocks and Commodities Magazine.”
By the way, this is a great magazine that I personally subscribe to and highly recommend. You can learn more about it by clicking HERE.
I’m especially proud of these awards because the winners are chosen by the readers themselves, meaning the users of the products and services.
Generally it’s mega stock market trading corporations with huge marketing budgets that win these awards. But I’m honored and humbled to say that I was graced with awards in both categories for which I qualified:
- The Technical Analysis Websites category.
- The Trading Centers, Schools, Training category.
The Trading Schools category was especially an honor because the only schools that achieved higher awards then me were FREE educational sites. Mine was the highest paid educational program, coming in well above all the “big boys” in the trading education world.
To be given such high rankings above massive stock market, E-minis and Forex trading companies is quite an honor and I thank all of you who voted for me.
Okay, now for TODAY’S VIDEO:
How To Day Trade and Swing Trade Triangles
There are many popular price patterns that we can trade:
- Head and shoulders
- Double tops
- Cup and Saucer
- … and many others
Of all the large multi-bar price patterns to day (both for day trading and swing trading), triangles are my favorite. So today you’ll learn an unorthodox way to How To Day Trade and Swing Trade Triangles.
Back in the days when I was the head moderator for a live chat room, I was known as the Triangle King. I was finding and trading Triangle patterns consistently when others couldn’t even see them!
Symmetrical triangles, ascending triangles, descending triangle … it doesn’t matter, I trade them all.
WHY TRIANGLES ARE SO GOOD TO TRADE
One of the reasons I love trading them is that they are part of my “Ex-Con” trade patterns, which I love. These are setups that identify the market cycle between contracting (low-volatility) markets, and expanding (high volatility) markets.
These are fun and profitable to trade because getting in at the beginning of a new high volatility cycle provides us with the opportunity to enjoy and big fast move in the market (and potentially big, fast profits).
One of the most common questions traders ask me is how to determine if the market is going to break out to the upside or downside.
The common wisdom is that ascending triangles break out to the upside and descending triangles break to the downside. Beware: the statistics I’ve seen gathered on that are based on daily charts and don’t apply to day trading.
Personally, the direction of the triangle has no bearing on whether I’m looking for price action to break out to the upside or downside. I use the fractal energy to provide the direction of the breakout.
This video will provide a bit of insight on how I trade them differently than most people.
There are 2 common ways to trade triangles:
- Trade the breakout of the upper or lower trend line.
- After the breakout, wait for the market to retrace back toward the triangle and then enter in the direction of the breakout.
I don’t personally like trading either of these techniques, though I’ll trade the second approach if it presents itself (usually I’m adding to my position at this point).
My preferred technique for trading the pattern is enter the trade “inside” the triangle. This is a rare approach I’ve not seen others teach.
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