Dictionary

Symmetrical triangle

A coil where highs fall and lows rise at roughly equal rates, contracting toward an apex with no directional bias of its own.

Three triangles. Three ways a market can coil up: a flat ceiling with rising lows, a flat floor with falling highs, or both edges closing in on each other. The swings get smaller, and traders watch whichever edge price leaves first.

Price compresses from both sides. Unlike the ascending and descending versions, the symmetrical triangle makes no claim about direction. It is a pure statement that volatility is contracting.

The usual approach is to trade the break with a stop on the other side of the apex, or to wait for the retest. Because volatility is low inside the coil, stops can be tight, which is the practical appeal.

Two known failure modes: price often breaks one boundary, reverses, and breaks the other, and triangles that run all the way to the apex tend to produce weaker moves than those that resolve around two thirds of the way in. Neither is a rule, but both are worth allowing for in stop placement.

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