Sleeping
Triangles
The name
may be fascinating, interesting, curious sometimes weird. The main myth with
this pattern has stimulated my need towards understanding pattern at a higher
level. When we go into, what is it all
about? How this pattern emerged? We come
to know there are 2 major parts in Sleeping Triangle. One is body
and other is the sleeping body of
the triangle. I call it as real body
and sleeping body.
Real Body
As per my observation the real body will be
lengthiest price action before breakout. The real body get into new resistance.
It will touch the higher price, the price action of the real body will be very
high and sometimes it take a short time duration (it may be formed within
couple of days). As the price action with real body is very high. We normally
tend to see RSI and other Oscillators going to a overbought zone.
Sleeping Body
The
sleeping body is the essential part which differs from a regular triangle. The
price action will never tend touch the support (it will touch only once before
giving a breakout) instead try to be at a higher level but the sentiments of
the market drag the price action lower such that it from a channel. The volume will be much lower compared to
real body.
The price action of the sleeping body can be
seen sticking to the upper level. And show the sentiments to be bullish.
Premature breakouts
Sometimes
we may see the price giving premature breakouts which will say the future
breakout (intension of bullish/bearish breakout) and price action.
Breakout
The
breakout will be formed when the price hit the support and when the support is good
the price rebound which cause a breakout.
*T&C Apply
Strategy: Trading using Sleeping
Triangle
When we
see a bullish breakout it is the only level where we can buy. As the price
level is low it is the best opportunity to buy at a breakout and sell at a
higher high. The triangles need to be traded opposite of a triangle. In the
figure above, we can see a triangle which resembles as a descending
triangle. In a descending triangle we
normally place a stop loss above the trend line but here in this sleeping we
need to place a stop opposite to the descending triangle
Types of Sleeping Triangle
These
triangle are of 2 types namely an
·
Ascending
Sleeping Triangle(Bearish)
·
Descending
Sleeping Triangle(Bullish)
An
example of descending triangle forming in Tata Coffee
Descending Triangle
For More details
Contact
Sangamesh.K.S
8904440661
