Page 11 - Module 14 Pattern Formations

Module 14 – Pattern Formations

Place your profit target
Measure the initial rise in price (the pennant's pole) before the market started to consolidate. Then
place your profit target the same distance above the pennant's breakout point. If, for example, the
initial price rise was 50 pips in size, you should place your profit target 50 pips above your trade
entry.

Fig 7 – Example of where to
enter trade whereby No 1
indicate Pole of the pattern
the Blue No 1 will be the
buy order entry point.
Place stop on the other
side of the pennant, below
the lower trend line as
indicated with Red No 2

Fig 8 – Example of where to
enter trade whereby No 1
indicate Pole of the pattern
the Blue No 1 will be the
buy order entry point.
Place stop on the other
side of the pennant, below
the lower trend line as
indicated with Red No 2.
Take profit level indicated
with the Green No 3

7. bilateral chart patterns – symmetrical triangles

Generally, a triangle pattern is a continuation or consolidation pattern. Sometimes, however, the
formation marks a reversal of a trend. Symmetrical triangles are generally considered neutral. From
a time perspective, triangles are usually considered to be intermediate patterns. Usually, it takes
longer than a month to form a triangle. Seldom will a triangle last longer than three months.

A symmetrical triangle pattern is relatively easy to identify. In addition, triangle patterns can be quite
reliable to trade with very low failure rates. There is caution concerning trading these patterns as

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