Triangle they out is the broadening price consolidation against the major trend in the form of higher highs and lower lows, keeping the retail traders out of the major trend. It is also denoted by TTO in the strat trading.
It’s the most important concept of strat trading, and most traders misdescribe it. However, I will explain TTO in detail to make it easy for every trader to understand.
Without the Triangle They Out concept, you will not be able to hold the trade longer and also miss huge profits.
So, you should read the full article and not miss any steps.
Understanding broadening formations and price movement in trading
Before explaining the TTO, let me tell you about the market structure and broadening formations.
Price always moves in the form of broadening or expansion. There will constantly be broadening formation in higher or lower timeframes.
Broadening means prices will expand in the form of higher highs and lower lows. By breaking the highs and lows, market makers hit the stoplosses of retail traders.
Minor broadening formations or retracements will form when the price moves higher at a specific timeframe. In reality, market makers are keeping the retail traders out by using this strategy. A lot of stop losses of retail traders hit during this price expansion.
Analyze the image below for a better understanding of price movement.
How do you identify the Triangle They Out (TTO) pattern?
The minor broadening formations during the major trend are the TTO patterns. The Triangle They Out represents that broadening formations in the form of triangle trigger the stop losses of retail traders by taking out highs and lows.
Using this pattern, we can add more to our positions and trade with the market makers.
Usually, the price will take a reversal on the 4th or higher wave in the direction of a major market trend.
- To identify the TTO pattern on smaller timeframes, follow the following steps:
- The first price wave will be the smallest and form against the trend; if the primary trend is bullish, it will be bearish. If the primary trend is bearish, then this wave will be bullish.
- The second price wave will be larger than the previous wave and fully engulf the last wave.
- The third wave will also fully engulf the previous wave, and after the fourth engulfs, the price will take a reversal in the direction of the major trend.
It can also extend to the 5th or 6th wave. It depends on market conditions. However, a TTO pattern is confirmed after 4th wave.
To identify the TTO on higher timeframes, we must look for scenario 3 or the engulfing pattern. It can form on any timeframe. That’s why lower timeframes will provide more detailed information about the Triangle They Out pattern.
What is the importance of TTO in Strat Patterns Trading?
In the strat trading, we can use the Triangle They Out pattern in two ways:
- To add more to a trade by opening orders in the direction of the primary trend
- To find the magnitude of the price
For example, when the price makes a TTO pattern, and the price makes a final wave in the direction of the primary trend, then we can open more trades using the strat patterns. Because this will be an opportunity to gain more.
We can also use the Fibonacci tool to determine the price retracement. However, you should open trades using only strat patterns in the main trend direction.
By drawing the trendlines on the higher highs and lower lows, we can also determine the magnitude of a trade. Prices mostly touch the trendlines after price swings. So we can extend the trendlines to determine the next price touch or price target.
How do you trade the TTO in Strat Patterns?
Trading the TTO pattern is easy because we are adding more to previous profitable trade by using this pattern. But you must remember that trade TTO only in the direction of the primary trend and only at the 4th wave or later. Don’t open trades too early.
Follow the following steps to trade the TTO:
- First find the major trend using the timeframe continuity.
- Then, wait for the TTO pattern to complete and look for reversal strat patterns matching the trend of higher timeframes.
- Open trades and keep holding until a target level is reached in a higher timeframe.
The bottom line
I hope you can now understand the Triangle They Out pattern. It tells us to open more trades on price retracement in the main trend direction. Market makers will eliminate retail traders using this pattern, but we will benefit from TTO.
If you have any questions related to this strat concept, please don’t forget to comment below. I will surely answer all of your questions.
Great Learning
very good explanation , can u explain what rob means by price getting stuck and now price discovery needs to start all over again