GBPAUD went South after an Ascending Triangle: Be Prepared for Anything

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A conventional Ascending Triangle would normally have more upward pressure and there would be more expectation for price to breakout to the upside. However, this is an example of GBPAUD on a 15min chart that went south from an Ascending Triangle. Any breakout traders who went long in this would have encountered a losing trade. This goes to show a few points:

  • Price could go up or down after any price consolidation (Triangles are a form of consolidation) and it usually happens with conviction
  • Breakout traders need to be ready to trade in both directions
  • Traders (and not just breakout traders) need to be prepared to be wrong

Prior to price falling short, there was a small failed breakout to the upside. Nonetheless, this is probably only clearer on a smaller timeframe and, more importantly, no one can know if the breakout would fail (or not) until it fails.

 

 

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