Triangles Point to Forex Profit

Triangles Point to Forex Profitforex chart 18,100 18,100 CA$5.14 6/492=1.2%forex chart analysis 320 320 CA$4.95 5/492=1.0%currency pair 3,600 3,600 CA$7.16 8/492=1.6%Word Count= 498

While analyzing a trending currency pair, sometimes, a very special triangle pattern will emerge. What in the world is this? Very simply, it actually indicates a lack of confidence on the part of buyers, sellers and sometimes even both! We call this the period of consolidation as market participants try to determine the longer term price action of the currency pair.
Statistically, it has been shown that when a triangle pattern shows up in a forex chart a, the trend will stay intact. But keep in mind that the numbers are not so overwhelming that you wont need to look for confirmation from some other indicator. Either way, its important to know what a triangle looks like, how it forms, and most importantly, what to do when you see it.There are three types of triangles-symmetrical, ascending and descending. Here is what yo need to look for in each one.The Symmetrical Triangle and Forex Chart AnalysisIn general, a symmetrical triangle pattern will confirm the existing trend-either up or down. When you look at it, you can almost see the battle for control of pricing direction by the traders of the currency pair. Like all triangles, it will announce itself as a disruption in the trend. Remember, an uptrending currency pair will have higher highs, and higher lows. While a downtrending currency pair will have lower highs, and lower lows. When a symmetrical triangle forms, it will have lower highs, and higher lows. This indicates that the sellers are not so confident in their position as to hold out for a better price. While the buyers are not so confident that theyll wait for a lower price.The Ascending Triangle and Forex Chart AnalysisAn ascending triangle will usually confirm a long position in a currency pair. It forms when there are higher lows but the highs remain at pretty much the same level. This indicates a temporary lack of confidence by buyers that the price will increase beyond the resistance level.The Descending Triangle and Forex Chart AnalysisA descending triangle pattern usually confirms a short position in a currency pair. It forms when there are lower highs but lows stay at about the same level. This shows a temporary lack of confidence by some short sellers that the price will fall below the support level.Triangles will always break out before they get to the end of the pattern. So you need to be prepared to act as the resistance and support lines close in on one another. This would mean either waiting for confirmation of the direction of the breakout or acting in advance of the breakout.In general identifying a triangle formation in a forex chart analysis is not very difficult in a trending currency pair. Its more important to know how to react to it when it does show up. So just follow the three steps. Identify. Look for confirmation. Then react.