Master the "Decision Point." Learn how to identify when market volatility is narrowing into a triangle and trade the inevitable directional breakout.
A triangle pattern occurs when price action narrows between two converging trendlines. As the range gets tighter, the market is essentially "running out of space." This forces a decision: the price must break out of the triangle with enough momentum to initiate a new trend. Triangle breakouts are highly sought after because they provide a clear and objective point for entry (the break of the trendline).
Pro Tip: Focus on Ascending and Descending triangles for higher probability, as the "flat" side already indicates where the market is finding—or failing to find—support or resistance.
You don't. That is why you place buy-stop orders above the breakout level and sell-stop orders below. Let the market hit your order to define the direction for you.
Measure the vertical base of the triangle (the height at the widest part) and project that distance from the breakout point. This is the classic "measured target" for triangle patterns.