Chart Patterns You should know before investing in cryptos !!! -- part 2

DESCENDING TRIANGLE

Descending triangles are the opposite of ascending triangles: They consist of a horizontal lower trendline and a diagonally sinking upper trendline (meaning the low stays low, and the high gets lower). The descending triangle is a bearish continuation pattern, meaning that a price is more likely to downtrend as the trading range decreases. A simple trade involving a descending triangle involves shorting once two bars close under the lower trendline and setting a stop-loss order at or just above the breakout line.

SYMMETRICAL TRIANGLE

While both ascending and descending triangles have a direction (up or down) and indicate a directional movement (also up or down), symmetrical triangles have neither. Symmetrical triangles represent near-equal bullish and bearish power and trade within a declining price range (basically, lower highs and higher lows). Eventually, the price range declines to a point (near the tip of the triangle) at which a breakout is likely to occur. The breakout can be either positive or negative. It’s tougher to trade upon symmetrical triangles since the direction can’t be assumed, so the best course of action is to place an order as soon as possible after the breakout occurs and confirms—a long position if the breakout is positive, or a short position if the breakout is negative. A stop-loss order can then be placed, respectively, at the upper trendline or bottom trendline of the triangle. To weed out false signals (called “head fakes” in this case), you should watch for a spike in volume and a few closes beyond the trendline before placing an order. All that said, symmetrical triangles do tend to break out in the direction of the move pre-formation. It is by no means something to assume or trade upon, but rather something to keep in mind given the strategy outlined above.