Is volume important in a symmetrical triangle pattern?
Volume is an important factor to consider when determining whether a formation is a true triangle. Typically, volume follows a reliable pattern: volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when breakout occurs, there should be a noticeable increase in volume. If this volume picture is not clear, investors should be cautious about whether the pattern is a true triangle. This traditional volume pattern develops because of investor sentiment during the creation of a triangle. Investors are uncertain. This uncertainty means that they are buying and selling sooner, which translates into a narrowing of the highs and lows, creating the “coil” shape, indicative of the triangle . Because investors are uncertain, many are holding on to their stocks, awaiting the market’s next move. When breakout finally does occur, there’s a surge in market activity because investors are finally certain enough about the direction of t
