Great Pound on Breakdown

The Triangle Formation

Triangle formations are corrective patterns that are bound by either converging or diverging trend lines. Triangles are made up of 5-waves that move against the trend in a sideways fashion. These triangles can be symmetrical, descending, ascending, or expanding.
Why is the symmetrical triangle pattern important?

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 a caution concerning trading these patterns a triangle pattern can be either continuation or reversal patterns. Typically, they are continuation patterns. To achieve the reliability for which the triangle is well known, technical analysts advise waiting for a clear breakout of one of the trend lines defining the triangle. Triangle patterns are usually susceptible to definite and dependable analysis, with the proviso that the investor must wait or a reliable, as opposed to a premature, breakout.

Occurrence of a Breakout:- Technical analysts pay close attention to how long the triangle takes to develop to its apex. The general rule is that prices should break out - clearly penetrate one of the trend lines - somewhere between three-quarters and two-thirds of the horizontal width of the formation. The break out, in other words, should occur well before the pattern reaches the apex of the triangle. To take the measurement, begin by drawing the two converging trend lines. Measure the length of the triangle from its base to the apex. Next, plot the distance along the horizontal width of the pattern where the breakout should take place. If prices remain within the trend lines beyond the three-quarters point of the triangle, technical analysts will approach the triangle with caution.

Measuring the Triangle:- To project the minimum short-term price objective of a triangle, an investor must wait until the price has broken through the trend line. When the price breaks through the trend line, the investor then knows whether the pattern is a consolidation or a reversal formation. To calculate the minimum price objective, calculate the "height" of the formation at its widest part - the "base" of the triangle. The height is equal determined by projecting a vertical line from the first point of contact with the trend line on the left of the chart to the next point of contact with the opposite trend line. In other words, measure from the highest high point on one trend line to the lowest low point on the opposite trend line. Both these points will be located on the far left of the formation. Next, locate the "apex" of the triangle (the point where the trend lines converge). Take the result of the measurement of the height of the triangle and add it to the price marked by the apex of the triangle if an upside breakout occurs and subtract it from the apex price if the triangle experiences a downside breakout.

Target Calculating:- Hight of the Triangle from point A to Point B is 0.3540 (1.3500 -1.7040) and we have seen pattern breakdown at 1.5600 apex and substractin the height of triangle from the apex brings to 1.2060 level on lower side in medium to long term. On lower sdie there is multiple support seen at 1.5250; closing basis on weekly chart below support level will confirm the down ternd to continue and with some minore hickup as profit booking will continue the down trend.