In my previous articles on the Triangle pattern we looked at how Triangles can be used to find entry points in trends and breakouts.
A colleague sent me an example of a live trade he caught last Friday that he entered when he spotted a Triangle pattern on the AUD/USD.
This is a very simple but effective trade entry. The AUD/USD on the 5-minute chart had broken out into a clean trend but it was also a rapid move. The risk of jumping into rapid moves such as these is that the price can pull-back the second you get in; you either have to have a very wide stop-loss or have a stop-loss that could be easily broken because the entry was timed incorrectly.
In this case, the price consolidated into a nice Triangle after the initial trend/breakout. This gave my colleague a long entry in the Triangle itself, with a stop-loss under 25 pips just below the Triangle.
Zooming out of the chart, it’s important to note that the Triangle sat nicely above the last key resistance:
This allowed the price plenty of headroom to move up.
In this case, my colleague netted +50 pips (over a 1:2 risk/reward ratio).
