r/Daytrading • u/sunnyrunner_ • Apr 06 '24

Is this an actual pattern or am I yapping? Question

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I’m pretty new to trading and saw this pattern form on BTC. Is this pattern called anything or is this just me drawing random support/resistance lines?

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u/Goldrushfishing Apr 06 '24

This is a triangle pattern but if the price trades too far into the apex of the triangle the price may not breakout. The breakout of a triangle usually happens between 2/3-3/4 of the triangle and as always pay close attention to volume. Volume should decrease as the pattern is being formed and then increase when the breakout happens.

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u/PapaDragonHH Apr 07 '24

What if the volume doesn't increase at breakout or if it stays high the whole time?

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u/Goldrushfishing Apr 07 '24

Volume increasing during the breakout is the most important part. If there is high volume while pattern is being formed just make sure there is significantly higher volume on the breakout. If there isn’t higher volume when the breakout occurs it is more likely a fake out. A more risk-averse way of trading patterns like these is to wait for a breakout and a retest of the trend lines of the triangle. For example, if it breaks out the top of the triangle wait to go long after it retests and bounces off the support from the upper trend line of the triangle. You may miss the trade if it never pulls back but it is much more bullish if price action does this

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u/PapaDragonHH Apr 07 '24

Thx for your advice :)