To succeed in stock trading, you need an edge. You need an advantage on the market. If you don't have that advantage on the market, you're dead financially. You will suck at trading.
The good news is that the triangle pattern can be such a edge. It gives you power to know when the market is about to make a move.
A triangle pattern is simply that. It looks like a triangle with the point pointing at the right edge of the chart. It shows that volatility is drying up. And that is a good thing for you because volatility can't go away. There has to be some volatility. There simply must be some.
So you know that the market will break out to either side of the triangle soon. Yes, soon. You don't know if the market will break up or down. And really you don't care. What concerns you is the fact that you now know the market is going to make a move.
You can place your limit orders on either side of the triangle and be ready to be put into the market. Then it's just a matter of placing your stop in the "middle" of the triangle and trailing your stop as far as you can.
It's a simple thing, really.
Sure there are some whip-saws. There will be no matter what you trade. There is no 100% effective trading method, and the good news is there doesn't need to be one.
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Source: www.ezinearticles.com
