Triangles: Video 26 A&B

Question 1

What sideways move with 3 pushes up or down (minimum 5 legs) will I see

Answer 1

Contracting
Ascending
Descending
Expanding
If sloped, call t a Wedge

Question 2

Describe a Descending Triangle

Answer 2

Has a bear trend line top, a a mostly horizontal bottom. That means there are always at least 2 pushes up.
The market wouldn’t be going sideways if one side was in control. So 50% chance breakout in either direction, and 50% chance that breakout fails.
20 or more bars in a trading range is neutral, market can go in either direction.

Question 3

Wedges that are sloped up or down. Triangles have about a 50% chance of a BO in either direction. Wedges have 75% chance of BO in opposite direction (Reversal)

Answer 3

Question 4

Define Expanding Triangle (ET)

Answer 4

A Triangle that gets wider. Some call it a Megaphone Pattern.
(A Triangle is a Trading Range that has three reversals. Most Triangles have converging lines.)
As soon as you see 5 reversals, it’s a triangle.
It is also always a Major Trend Reversal

Question 5

Sometimes market repeat a pattern/behavior several times on several different time frames. So you get smaller versions of the pattern, within larger versions of the pattern. It increases the chances of the pattern working as i expect it to work. This is an example of…

Answer 5

Nested Pattern.

Question 6

Most Expanding Triangle Tops evolve into ET Bear Flags

Most Expanding Triangle Bottoms evolve into ET Bull Flags

Answer 6

Question 7

Computers always ignore bad patterns. Computers will see the pattern as something else.

Answer 7

If you have a symmetry issue where the spacing between 1-3 is small compared to the spacing between 3-5. It’s useless, no one will be trading it.

Question 8

A Triangle is a type of _____________ Pattern

Answer 8

Reversal Pattern

Question 9

A Triangle is a type of Tight Trading range, where there are at least ___ legs in at least one direction.

Answer 9

3

50% of a breakout either way and 50% chance the first breakout wil fail.

Question 10

Any time the market goes sideways late in a trend it is a sign of the __________. And is a Final Flag

Answer 10

The End

Question 11

Define Ascending Triangle:

Answer 11

An Ascending Triangle has a bull trend line below and a mostly horizontal top.
Same 50%: 50% chance of up r down breakout. 50% chance of first breakout failure.
This is a sideways pattern fairly late in a rally.
After 20 bars, any TR has 50% chance of breakout up or down. Reasoning is that it wouldn’t be in a Tight Trading Range if one side had an advantage. One you get that many bars into it, it doesn’t matter what has gone on before it.

Question 12

Triangles can be small. Every ii and iii is a triangle

Answer 12

ii is two consecutive inside bars.

Question 13

A Wedge is a Diagonal Triangle that is sloped up or down.

Answer 13

Triangles have a 50% chance of a breakout in either direction.
Wedges have a 75% chance of a breakout in the opposite direction (reversal)

Question 14

A Triangle can be a Top (Reversal Pattern).

Answer 14

Notice on the green line Double Bottom, 4 is below 2.
Look at the weak bear Breakout, BUT 8 bars without a bull body.
Must see as Always in Short and Higher probability of bears selling here.

Question 15

In this Triangle, why are the bear legs getting weaker?

Answer 15

The bears are not selling as aggressively and the bulls are buying more aggressively.
3, 5, 7 and 9 failed each time and each was weaker than the prior bear attempt.

Question 16

Am Expanding triangle is a Major Trend Reversal (Here, Lower Low Major Trend reversal).
Expanding Triangles often try to form bigger triangles