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2004issue C061-3

Testing triangle breakouts against volume filters

When a triangle leaves its coil, volume-price analysis can ask two separate questions. One asks whether the breakout bar is unusually active for that same market. The other asks whether volume was rising or fading while the pattern was still forming. This archive article keeps those checks from being treated as a single confirmation.

  • Compare breakout volume with that same market's own recent average. A quiet name's busy day can still be smaller than a liquid name's typical hour, so raw cross-stock volume comparisons are unusable.
  • Treat a breakout as above-average only when volume exceeds twice the prior three-month average. Volume at or below that average is light.
  • Ask a second, separate question about lifetime volume trend: whether a straight line fitted from the first day of the pattern to the last day slopes up or down.
  • The historical tables describe group averages. Heavy breakout volume was the more frequent preferred label, especially on upward breaks, but some triangle and double-bottom rows preferred light volume, and individual examples both matched and contradicted the labels.
Entries in this reading3 entries
Current trackTriangle pattern55 readingsVolume-price analysis129 readingsBreakout confirmation172 readings

Two volume measurements, not one label

This historical workflow studied how an ascending, descending, or symmetrical triangle leaves a tightening coil bounded by converging trendlines. The teaching object is that leave, not the coil itself. The event under review is the breakout: the first decisive move through a pattern boundary.

Volume-price analysis then made a within-market comparison of recent typical volume with the volume that appears on the break, and with the slope of volume while the pattern was still forming. The two readings were used to judge whether participation supports the event, and they were not collapsed into a single volume score.

Judge breakout volume inside one market

Breakout volume was judged against each stock's own recent average. A quiet name's busy day can still be smaller than a liquid name's typical hour, which makes raw cross-stock volume comparisons unusable. The comparison stays inside one market: that name's recent typical volume versus the volume that appears on the break.

What counted as above-average

A breakout was classed as above-average only when volume exceeded twice the prior three-month average. Volume at or below that average was classed as light. That rule is a within-market filter, not a ranking against other names.

Preferred labels were not universal

The pattern-by-direction table assigned a preferred breakout-volume label to each row. Heavy was the more frequent label, especially among upward breaks. A minority of rows, including some triangle and double-bottom variants, were labeled as preferring light breakout volume, so heavy volume was not treated as a universal rule.

Light-volume results in the table sat close together, and the write-up flagged the chance that small samples were creating an unstable difference rather than a durable rule.

Average post-breakout move after heavy versus light volume

A heavy breakout bar usually meant a larger average follow-through, especially on upward breaks of rectangles and of ascending or symmetrical triangles, but the label is not universal: Eve-and-Adam double bottoms and a few triangle rows preferred a quiet break or were a coin flip. These percentages are Bulkowski’s published Figure 1 sample averages — the rise to the ultimate high after an upward break, or the decline to the ultimate low after a downward break — read from the article table, not from the price-chart photographs.
A heavy breakout bar usually meant a larger average follow-through, especially on upward breaks of rectangles and of ascending or symmetrical triangles, but the label is not universal: Eve-and-Adam double bottoms and a few triangle rows preferred a quiet break or were a coin flip. These percentages are Bulkowski’s published Figure 1 sample averages — the rise to the ultimate high after an upward break, or the decline to the ultimate low after a downward break — read from the article table, not from the price-chart photographs.

He scored a break as heavy only when volume was more than twice that same stock’s average for the three months before the break; light means average or lower. Cross-stock volume comparisons were avoided on purpose. Several light-volume averages sit within a point of each other, and he warned that some samples may be too small for a firm ranking.

Lifetime volume trend is a different measurement

Volume direction during the pattern was estimated by fitting a straight line to volume from the first day of the pattern to the last day, then labeling the slope as rising or falling. That lifetime volume trend is measured independently of the breakout bar.

The start-to-end volume-trend test did not produce one winner. The table split between combinations marked better with a rising slope and combinations marked better with a falling slope.

Tables describe group averages

Individual triangle and related-pattern examples were presented to show both matches and contradictions of the tabulated volume labels. The tables describe group averages rather than a guaranteed next outcome.

What the wrap-up treated as more consistent

The wrap-up treated breakout-day volume as the more consistent association and treated the forming-period volume trend as mixed for both upward and downward breaks. It also noted that a larger sample could change the reading.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
16 of 33 in the Triangle pattern track
20041-4 pp.Next on Triangle patternMute triangles, histogram force, and trader optimizationPair a familiar oscillator or pattern with a second independent tool as a confirmation or non-confirmation step, not as a search for one best indicator.
All readings on this track · 33 readings
  1. 1986Gold as a double zigzag before a contracting B-wave triangle
  2. 1990Scoring competing wave counts after a crash
  3. 1992Pre-trade checklist for trendline and triangle signals
  4. 1995Chart patterns as tactics, not strategy
  5. 1996Constructing Elliott wave counts with triangles and Fibonacci
  6. 1996A price-channel case study with a pending triangle signal and a planned stop-loss
  7. 1996Expanding triangle as a dual-label fourth-wave reversal worksheet
  8. 1997Rising wedge construction, breakout, and volume
  9. 1997Confirm structure and conditions before naming a Triangle pattern
  10. 1999Drawing the Triangle pattern before Breakout confirmation and the Stop-loss order
  11. 2000Four-phase market cycle triangle breakouts
  12. 2000Continuation triangles as a three-lock experiment
  13. 2001Folding rule: stacking three trendlines on an accelerating swing
  14. 2003A scored symmetrical triangle on a utility stock
  15. 2003Constructing wedges versus flat-boundary triangles
  16. 2004Testing triangle breakouts against volume filters
  17. 2004Mute triangles, histogram force, and trader optimization
  18. 2004Constructing falsifiable reversal and continuation patterns
  19. 2004Construct a corrective rising wedge before treating it as a short
  20. 2004A continuation triangle with Fibonacci targets and an apex stop
  21. 2005Pre-breakout filters for classic chart patterns
  22. 2005Reverse trendlines as a geometry lab for convergence and expanding triangles
  23. 2005Volume shapes versus triangle and double-pattern breakouts
  24. 2005A nested-pattern checklist on the 2005 euro
  25. 2005Volume test for a descending triangle breakout
  26. 2010Constructing triangle, broadening, and head and shoulders patterns
  27. 2011Treat a numeric pattern rank as a shortlist
  28. 2011Evaluating the head-and-shoulders as a falsifiable reversal
  29. 2013Auditing chart patterns by the first post-breakout swing
  30. 2014A three-gate entry for a triangle pullback
  31. 2014Golden triangle: a 50-day pause that still needs both gates
  32. 2014The triangle qualifier came after the rating pre-screen and the fifty-day bounce
  33. 2018Aligning daily, weekly, and monthly triangles with trendlines and Fibonacci retracements
By fieldChart patterns222 readingsBy year2004107 readings
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