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Symmetrical Triangle Pattern on Daily Gold Chart

June 10, 2018 at 19:00 by Vladimir Vyun

A symmetrical triangle pattern has formed on the daily chart of gold. Such pattern occurs when prices move sideways with ever decreasing volatility, marked by lower highs and higher lows. Markets usually do not like sideways movement, therefore a breakout either to upside or to downside should occur sooner or later. Being symmetrical, the pattern does not inherently suggest in which direction a breakout should occur. But it is reasonable to assume that in most cases prices will continue to move in the direction they were going before consolidation. In this instance, gold was falling, therefore the chart presents advises for the downside breakout scenario.

On the chart, yellow lines, drawn trough sequential highs and lows, show the symmetrical triangle itself. The cyan line is drawn 10% the triangle’s width off the lower border of the pattern and provides an entry point for short positions in case of downside breakout. The green line is situated at the triangle’s width below the pattern and suggest a profit-taking objective. If prices break to the upside or return back to the triangle after a downside breakout, the pattern is invalidated and traders should readjust their strategies.

You can click on the image to see a full-size version:

The chart was built using the ChannelPattern script. You can download a MetaTrader 4 chart template for this gold pattern. You can also trade it using the free Chart Pattern Helper EA.

Update 2018-06-13 10:46 GMT: Gold has broken out through the bottom side of the triangle and has hit the entry level today at 8:20 GMT. The short position was opened at 1293.36 with stop-loss at 1299.89 and take-profit at 1272.70. The price has retraced somewhat since then:

Gold - Symmetrical Triangle Pattern on Daily Chart as of 2018-06-13 - Post-Entry Screenshot

Update 2018-06-14: The precious metal has rallied following the Fed rate hike yesterday and hit the stop-loss level at 18:58 GMT:

Gold - Symmetrical Triangle Pattern on Daily Chart as of 2018-06-14 - Post-Exit Screenshot

If you have any questions or comments regarding this symmetrical triangle pattern on the chart of gold, please feel free to submit them via the form below.

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