October 6, '04. The Triangle as Trickster
Wednesday: The triangle is the hardest pattern of all to trade with any consistency--and yet there are whole books dedicated to its opportunities. Curtis Arnold's book title includes the phrase "A Proven Method for Consistently Beating the Market", while Teresa Lo, in apparent recognition of the triangle's demonstrable treachery, refuses to trade them at all. We at Valhalla Futures have actually identified some nine different triangle patterns that recur with frequency in the index futures. The most common attribute of one of these triangles, called the Split Opening Triangle, is its false breakout in the wrong direction, just before a true breakout in the oppposite direction breaks into a trend. Yesterday, we mentioned the Split Opening as a type of opening day model. Study the chart above and see if you can discern the false breakout that is actually a signal that the pattern was about to go decisively the opposite way. Come learn this and eight other key trade triggers associated with the index triangle patterns in the course Pivots, Patterns and Self Recognition, available through daytradingmethods.com