Stock Indices Consolidation Break-out Stock Indices Chart Pattern

With Stock Indices Consolidation Break-out Indices Pattern the stock market price breakout can move in any direction.

Stock Indices Consolidation Break-out Indices Pattern

Symmetrical triangles are chart patterns with converging trend-lines that form a consolidation period of the price. The technical analysis buy signal from a symmetrical triangle is the upside price breakout, while a downside price break-out is a technical sell signal. Ideally the market breaks out from a consolidation chart pattern - symmetrical triangle prior to reaching the apex of the triangle.

Indices Trend Lines can be drawn by connecting the lows and highs of the consolidation chart pattern phase, the trend lines formed are symmetric and converge to form an apex -indices triangle pattern -indices consolidation pattern. A Consolidation Break-out should occur somewhere between 60-80% into the triangle pattern. An early or late Stock Indices Consolidation Break-out is more prone to whipsaw signals, & therefore less reliable. After a price break-out the apex of the triangle forms support and resistance levels for the price. price which has broken out of the apex shouldn't retrace past apex of the triangle consolidation chart pattern. The apex of the triangle consolidation pattern is used as a stop loss order setting area for the open stock trades.

When these indices consolidation chart patterns form we say that the market trend is taking a break before deciding the next direction to move.

These indices consolidation chart patterns form when there is a tug of war between the buyers & the sellers & the market can't decide which way to continue.

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However, this consolidation chart pattern cannot go on forever & just like in a tug of war one side eventually wins, looking at the chart below see how the consolidation eventually had a indices breakout and moved in one direction - Stock Indices Consolidation Break-out Indices Chart Pattern. Now how do you make sure you choose winning side?

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Stock Indices Consolidation Break-out Stock Indices Chart Pattern - Index Consolidation Break-out Indicator - Stock Indices Consolidation Break-out Indicator MetaTrader 4

Now back to our index question, how do we as traders make sure that we are on the winning side of trade?

Well we wait until the price moves past one of the trend-lines of the triangle consolidation pattern and put buy orders or sell orders in that direction. If price indices breaks the upper consolidation line we buy, if it price breaks the lower consolidation line we sell.

Alternatively if you don't want to wait for a consolidation indices break out - you can use indices ending orders.