Chart pattern: Bearish symmetrical triangle

What is a bearish symmetrical triangle?

A bearish symmetrical triangle is bearish continuation chart pattern. The pattern is formed by two converging trend lines that are symmetrical in relation to the horizontal line.
The first line is a bearish trend line creating the resistance, also called the "resistance line of the bearish symmetrical triangle".
The second line is a bullish trend line creating the support, also called the "support line of the bearish symmetrical triangle".

For the symmetrical triangle to be called "bearish", the movement preceding the triangle’s formation must be bearish.

A bearish symmetrical triangle is confirmed/valid if it has good oscillation between the two lines.
Each of these lines must have been touched at least twice to validate the pattern.
NB: a line is said to be "valid" if the price line touches the support or resistance at least 3 times.
This implies that the bearish symmetrical triangle is considered valid if the price touches the support line at least 3 times and the resistance line twice (or the support line at least twice and the resistance line 3 times).

The price objective for a bearish symmetrical triangle is determined by the height of the base of the triangle plotted at the breakout point (exit from the triangle). To achieve the price objective, another technique consists in drawing a parallel to the bearish symmetrical triangle’s resistance line from the first contact with the support line.

Graphical representation of a bearish symmetrical triangle

Statistics of bearish symmetrical triangle

- In 57% of cases, exit from a bearish symmetrical triangle is bearish.
- In 91% of cases, the downward movement continues after exiting the triangle.
- In 57% of cases, the price manages to reach the triangle's price objective in the event of a downward exit.
- In 60% of cases, the price makes a pullback in resistance on the triangle’s support line.
- In 16% of cases, the price makes false breaks in the support/resistance lines (false exits from the bearish symmetrical triangle).

Notes on bearish symmetrical triangle

- A bearish symmetrical triangle’s exit most often occurs at about 80% of the pattern.
- Clean and forceful breaks/exits give better performance.
- Performance is best when the bearish symmetrical triangle is formed at the beginning of a bearish trend.
- Avoid opening a position if the break/exit occurs before 3/4 of the triangle.
- Resistance pullbacks on the triangle’s support line are detrimental to performance.

For your information: A bearish symmetrical triangle is a continuation chart pattern. Its opposite is a bullish symmetrical triangle.