Novice Traders' Notebook  |  OCT 1996

On Symmetrical Triangles by Thomas Bulkowski

On Symmetrical Triangles by Thomas Bulkowski You might have seen triangle formations and wondered what they were all about. You might have been caught on the losing side of a descending triangle and wondered what happened. For those of you who've wondered what was going on, here's the first part of a two-part refresher course on the three basic types of triangle formations and how to use them in your investment decisions. Before I buy a stock, I search the price chart for familiar patterns. The last thing I want to do is to purchase a stock, only to see it drop down beyond my stop, resulting in a loss. Checking for technical patterns allows me to look for some indication that I should not buy a stock. Over time, I find that my memory for various chart patterns gets somewhat fuzzy and I need to refresh my memory for what to look for. Here, then, is a description of symmetrical triangle formations and their significance in my battle plan in the market.

by Thomas Bulkowski