Symmetrical triangles, sometimes called coils, are a popular chart pattern because they appear often and perform reasonably well in a bull market.
This opinion is based not on the performance rank, which is mediocre, but on trading experience.
The Price trend Can be any direction leading to the chart pattern, as it has Two trendlines that bound prices; the bottom trendline slopes up and the top one slopes down.
Price must cross the pattern from side to side, filling the triangle with price movement, not white space.The Shape must be Triangular as Prices move between two converging trendlines.
Price must touch each trendline at least twice, forming distinct valleys and peaks. Volume Trends downward 75% twice or once, while the most important of all is the breakout which can be Upward 54% of the time and 75% of the way to the triangle apex (upward breakout) and 73% of the way for downward breakouts.
The consolidation pattern of the symmetrical triangle forms as volume recedes. Then, price breaks out downward (most times), but within a few days, price reverses and shoots out the top of the symmetrical triangle, busting the pattern and leading to a strong move upward, this is called BURSTED PATTERN.
Busted patterns (when the breakout is in one direction only to see price reverse and breakout in the opposite direction) often result in strong moves. However, symmetrical triangles have a tendency to double bust -- the final breakout direction is the same as the original one.
TECHNICALS suggests that price is getting close to a major move at the end of the triangle, which will likely consolidates more at the 0.618fib level before a breakout will be achieved. Aiming at fib extension targets after the breakout.
Disclaimer: This is for educational purposes,it is not intended as a financial advice.
The analyst won't be responsible for a loss of fund. Trader should be able to manage risk.