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Forex Glossary

The Industry's Most Important Terms Explained

The forex industry is made up of countless definitions and it's easy to forget a few along the way. But because no forex education can be complete without a glossary of forex terms, we've compiled one which aims at explaining key definitions in the simplest way possible. This way, you'll never be lost or confused again!


Triangle

A continuation pattern comprised of two converging sides with at least 4 reversal points (2 tops and 2 bottoms). The opening (height) of the triangle is called the base whereas the intersection of the two sides is called the apex. Three popular types of triangles are:

  • Symmetrical (coil) – Two converging sides. Upper trendline is descending whereas the lower trendline is ascending
  • Ascending – The upper side is flat whereas the lower side is ascending
  • Descending – The lower side is flat whereas the upper side is descending

Volume is usually heavier on the breakout side hence giving hints to which side to expect the breakout. Two measuring techniques are available for triangle breakouts:

  • Height projection – Project the height at the breakout point to estimate the minimum target
  • Parallel line – Draw a parallel line from the top of the base to the triangle side. The minimum target is estimated at the parallel line with an approximate time forecast the intersection of the 2 triangle sides (apex).

Category: Technical Analysis

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