Triangle Breakout Failure – Bullish

An interesting formation is the failure of a triangle pattern breakout. 4-column triangle failure is a 6-column reversal pattern.

After the triangle pattern price convergence breakout, a strong downtrend is expected. Sometimes, however, the breakout proves to be a trap or false breakout, and the trend immediately reverses. That reversal trade also offers a trade opportunity.

The bullish triangle breakout pattern is a double bottom sell pattern that occurs after the triangle pattern. If the bearish triangle breakout pattern is immediately followed by a bullish double top buy pattern, it marks the failure of the bearish triangle breakout and offers a bullish reversal trade opportunity.

Triangle pattern in this case is followed by a bear trap pattern.

This concept is explained in the book on P&F charts by Prashant Shah.

Click here to learn more about the pattern.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.