How to trade the triangle pattern in the Forex market
Chart pattern trading method is a very effective way to secure big profit from this market. Very few traders can deal with the major chart pattern. In most cases, rookies become confused since they don’t know how to evaluate the major chart patterns and look for reliable trade signals. But if you take some time and systematically evaluate the critical market data, you will notice that identifying the key chart pattern is not that tough.
Among many different chart patterns, we are going to teach you the perfect way to trade the triangle chart pattern. After reading this article, you will feel confident with your actions and become good at triangle chart pattern trading strategy.
Identification of the triangle pattern
The first step is to identify the triangle chart pattern. For that, you need to rely on the 4-hour chart. If you try to look for the chart pattern in the minute time frame, you are not going to succeed as a professional trader. Use the candlestick chart and trend line tools so that you can connect the important points to draw the triangle chart pattern. Once you have identified the chart pattern successfully, you need to validate the pattern by switching to the lower time frame. In the lower time frame, you should also see the triangle chart pattern is visible.
Waiting for the breakout
These are the most critical steps for trading the major chart pattern. You have to look for a clear breakout of the support or the resistance line. Once the price breaks above or below the major chart pattern, you should be looking to take the trades with an extreme level of caution. The rookies tend to execute the long and short trade right after the break. But the professional traders wait for the minor correction in the price so that they can take the trades with more confidence. Once you have masters the key technique to trade the breakout, you will become more comfortable with this approach. Be cautious about your actions when the price reach at the critical point in the mt4 platform. Stay calm and look for the trade setups based on your logics.
Testing your risk tolerance level
Being a professional trader, you need to accept the losing trades. Without accepting the losing trades, it will become nearly impossible to make a consistent profit. Risk 1% of your capital during the first few months. Even after learning the details about the triangle chart pattern, you should not be taking more risks as it will impose a great threat to your trading career. Follow a safety protocol so that you don’t have to lose a big capital in the early stage. Evaluate the risk profile in a standard way so that you don’t have to blow up the trading account within a short time.
Evaluate the major news
You have to evaluate the major news in a very professional way. Never think you know everything about this market and can take the trades with a great level of ease. The high-impact news is also known as the price driving catalyst. So, if you want to protect your trading capital, you have to think about the major news release. The breakout in the price should take place right after the high-impact news. At times, the breakout might take place in the absence of high-impact news. These are the key moment when you might experience a false breakout. So, be careful about such conditions.
The direction of the breakout
Usually, the breakout takes place in favor of the trend. So, if you ignore the existing trend, chances are high that you will not be able to make a consistent profit most of the time. Stick to the trend trading technique as it provides better opportunities. Most importantly, it will make you feel more comfortable and you will be able to trade with low risk.