What is Bullish Symmetric Triangle formation?

A Symmetrical Triangle is a chart formation defined by at least two lower highs and two higher lows. It typically takes shape during a trend as a continuation pattern i.e. when an asset solidifies in a manner that creates two intersecting trend lines with the same, or at least similar, slopes (see chart here).

There are rare cases when symmetrical triangles represent significant trend reversals, however they usually occur as a continuation pattern of the current trend. The chart above shows the USD/JPY in uptrend, as it moves further higher once the triangle resistance is broken. Nevertheless, continuation or reversal, traders should plan their next move only after a confirmed breakout, which can be seen in the brake of the resistance of the triangle.

A breakdown that happens from the supporting trendline represents the beginning of a new bearish trend which is opposite of the breakout from the upper trendline which creates a new bullish trend. Once the bulls beat the bears or the opposite, and a breakout direction is confirmed, traders can plan their next move accordingly.

Just like the other chart patterns, the Symmetrical Triangle formation also works best together with other patterns and technical indicators. For example, once the pattern extends, volume levels should start to decline. This could mean that the breakout is about to happen.