One Way To Trade The Triangle
When I look for potential intraday
setups out of classic patterns, my initial risk is either ‘centered’ around
pattern supports, or by use of a money stop up to .35, if the stock’s volatility
demands it. Smaller issues don’t usually require that much commitment as
technical breakdowns on failed patterns will more than likely trigger you out of
the trade well before the money stop ever would.
One of the patterns that I look at for trade entry
is the triangle. With symmetrical versions I like to draw in a center, or apex
line and see how it fits into the risk-management part of the trade. For
instance, in today’s session the following alert went out on XOMA
(
XOMA |
Quote |
Chart |
News |
PowerRating).
10:32:35
Intraday
Setup Alert
XOMA (XOMA)
has triggered out of an intraday triangle.
The stock is up .73 at 8.24 as it establishes 52-Week highs in today’s trade.
XOMA triggered at the 8.20 level above the
slanted resistance of the familiar triangle pattern. With an entry out of this
type of formation, I’ve found that quite often by drawing in an apex or
bisecting line, I can visually see an area of support that might otherwise go
unnoticed. It doesn’t always work functionally into the risk-management
equation, but when it ‘fits’ within your own risk parameters, and price supports
within the pattern…I like to think, ‘It’s too easy, not to use it.’