This system mechanically recognizes upside breakouts from symmetrical triangle patterns during rising trends.
2017/02/07 Revision A: Improved ascending triangle detection (by minimizing the threshold between peaks)
2017/02/07 Revision B: Fixed "index was out of range" error
- Setup a symmetrical triangle consisting of two price peaks and three price troughs must form. A peak occurs when price has declined 3 percent or more from the most recent high. A trough occurs when price has advanced 3 percent or more from the most recent low. The second (most recent) peak must be below the first peak, while the most recent trough must be above the preceding trough, which must be above the trough before that. The projected entry (breakout) level is determined by extending the trendline formed by connecting the two price peaks.
- After a symmetrical triangle has formed, buy next bar with a stop order above the upper trendline if the closing price is also above the 100-day SMA.
- Sell with a stop-loss order when today’s low falls below the 40-day lowest low.