The triangles are basic formations widely found during the chart analysis, projecting various depictions of the market geometry and specifying general patterns found in general on the financial markets. As prices mostly would tend to consolidate in about 60% of the period spend on markets, they can be brought together by forming a triangle formations, which is a more accurate way for depicting the actual state and progress of the underlying features at such stage.

Contracting Triangle Formations

Triangles will be either expanding or contracting, with contracting being more frequently found and the expanding less likely to occur, however still providing strong means for perpetrating the markets with such defining patterns. Some of the economical data recordings will even take form of reversal patterns, where the price would break into an opposite direction of a previous trend, whereas the continuation patterns is very likely to break in the same direction as the same trend. The most important portion of the chart would make for the b-d line to define a particular trend, thus creating a more suitable environment for the pattern to exist and form a contracting triangle within the same instance.

If the pattern will occur after a bearish trend, it should be widely considered to buy the put options as always, whereas the call options have to be attained right after a bullish trend has already passed. Some of the additional clues can provide the viewers with substantial informative materials as to which the regression will take place, so that the formation would produce more realistic results for finalizing the transactions.