Triangle of Trade explained by professional Forex trading experts the “Triangle of Trade” FX trading team.

Triangle of Trade

Triangle patterns can offer us frequent and easily identifiable trend based trading opportunities if we keep an eye out for them. Today a descending triangle is forming on the USD.DKK (Dollar/Danish Krone) currency pair on the daily chart. These formations are normally seen as continuation patterns and form when at least two descending highs form a trend line.

It is also critical that there is a minimum of two lows established at the bottom of the triangle. These low points will link together and a horizontal line of support. The two lows do not have to be exact, however if there is not a bounce in price we can quickly find ourselves in a breakout environment.
Trading Opportunity

Our descending triangle being a bearish continuation pattern should get us looking for short trades with the direction of the trend. My preference is to use a series of entry orders along our upper trend line near the 5.5000 handle. Stops should be set above our trend line and limits can be set at the bottom of our triangle near 5.2500 giving us a greater than 1:2 Risk-Reward setting for the trade.

An alternate approach can also be taken if price breaks lower through support. We can use a breakout strategy and enter a break below 5.2000 and place stops over old support (now resistance) at 5.2500.

Triangle of Trade Conclusion

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