There are many chart patterns in forex that you must learn to use to become a successful forex trader. One that we will discuss in this article is about bilateral chart patterns or what is known as bilateral chart patterns. Check out the information below because this is important especially for those of you who are new to the world of trading!
What is Bilateral Chart Pattern?
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In this advanced class article, you will learn about bilateral chart patterns. Before going deeper into the types of bilateral charts, you must first know what a bilateral chart pattern is. A bilateral chart pattern is a pattern that indicates a price or currency that can move in two directions. Either the price will move following the current trend, or the price will move against the trend. Sounds like a strange forex signal, right? So what can traders do with that signal? Relax! You as a trader can still use this type of pattern to take advantage. Because, the price cannot be predicted where it will go, traders will protect the risk and trade both ways. However, traders will not be trading the market, but will be trading two orders. One of these trades will be a sell transaction and the other will be a buy.
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Types of Bilateral Chart Patterns
- The Descending Triangle (Descending Triangle Chart Pattern)
Descending Triangle or known as Descending Triangle in forex world is the opposite of ascending triangle chart pattern. This triangle consists of a series of descending highs and forms a descending resistance line and a horizontal support line. Traders should face price breakout in both directions.
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Similar to other triangle patterns, traders should place buy orders above the resistance line, while for sell orders, traders should place them below the support line. When a breakout occurs, traders should cancel orders that are not on the side of the breakout. If the ascending triangle pattern shows that buyers are dictating the price, it is assumed that the price will remain at the lower end of the scale, while the descending triangle pattern shows that sellers are the ones who actually hold the power and they are also dictating the price in the market.
- The Ascending Triangle (Ascending Triangle Chart Pattern)
In an ascending triangle pattern, the resistance line is horizontal, while the support line slopes upwards in a sequence of higher lows. In this case, it means that buyers are unable to push prices above a certain level, meaning that buyers are only able to influence the market and gain momentum. Keep in mind that buyers are still unable to break through the resistance level.
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However, as time goes on, buyers can gradually start to overcome sellers and then price moves up and higher lows are made. It is important for you as a trader to be ready for a breakout in one direction or the other and place your entry orders accordingly. Buy is above the resistance line, while sell is below the support line. In most cases, the breakout occurs at the tip of the triangle and usually it will be to the upside, however, this is not always the case.
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- The Symmetrical Triangle (Symmetrical Triangle Chart Pattern)
The last type of bilateral chart pattern is the symmetrical triangle pattern. This chart pattern refers to the resistance direction of the high line sloping at a downward angle and the support line or support from the slope of the low line upwards, when the direction of the lines meets towards one point at the tip of the triangle. The reason this happens is because neither sellers nor buyers can make any changes to the price. Basically, this means that no one is able to gain momentum and dictate which direction the price will move, whether up or down. This is commonly referred to as a consolidation period. When the two lines meet, the most likely thing that will happen is a breakout or explosion. One thing about an explosion is that the fact that no one really knows which direction the explosion will occur. When you encounter this type of chart, it is advisable to immediately place a stop entry just below and above the slope of the line.
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Bilateral patterns are tricky to trade, as they are not as reliable as other patterns. When trading them, it is important to consider current market trends and other trading tools, this is important to do to determine the most likely outcome. Above is information about bilateral chart patterns. Keep up to date with the latest information through the GIC journal which will be announced every day. Of course, you can also trade on the GICTrade application with its latest feature, an ECN account, enjoy the advantages of the latest features with the lowest spread starting from 0! Also follow the GIC Gebyar Hadiah and get attractive prizes in it from GIC worth billions of Rupiah without a draw!
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