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Golden Triangle Rate this Topic:
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Posted : Wednesday, October 15, 2014 9:55:04 AM
Registered User
Joined: 10/7/2004
Posts: 74

Bruce in the Sept 2014 issue of Technical Analysis of Stock and Commodities, there is an article on Finding the Golden Triangle setup. I have this setup on TOS, but prefer to do my scanning on TC2000. Is this possible to do on TC2000 as both an indicator and a scan? While the setup looks pretty good, the stock could go either way so this is not a slam dunk, that's why I want to look at the scans to see how stocks react and if there is something else required to predict direction with a higher probability.

Thanks for your csideraton


Posted : Wednesday, October 15, 2014 4:01:25 PM

Worden Trainer

Joined: 10/7/2004
Posts: 63,210

I've read through the article. The basics concepts seem pretty straightforward. You might be able to scan for this, but it is probably not possible to create a single indicator to identify Golden Triangles.

We can create a Condition Formula for Convincing Volume. If I'm understanding correctly, this would be the buy day.

V > MAXV4.1 AND V > AVGV50 AND C > AVGC50 AND ((C > O AND C > C1) OR L < AVGC50)

But just because there is Convincing Volume does not mean the setup was correct, and the setup is more complicated to identify. It isn't because the definitions used are particular complex. It is just a matter of the variable time frame over which the setup can develop.

We can create Condition Formulas to identify the entire price bar being above its moving average.

L > AVGC50

And we can add checks for the distance between price and its moving average to be increasing.

L > AVGC50 AND C - AVGC50 > C1 - AVGC50.1

We can even check for this to be on above average volume.

L > AVGC50 AND C - AVGC50 > C1 - AVGC50.1 AND V > AVGV50

If we use one of these Condition Formulas as the Boolean Formula in a Custom PCF % True, we can get the percentage of the time it has been true over the Period of the Custom PCF % True Indicator by setting the Period as desired and the Average Type to simple.

But how long do you set the period? The period for these setups can be quite variable.

We can check for the down move on low volume using similar formulas with Custom PCF % True Indicators having Periods greater than 1.

C - AVGC50 < C1 - AVGC50.1 AND V < AVGV50

And we can check for recent bars with lows below the moving average using the same technique.

L < AVGC50

But throwing it all together in an EasyScan results in something that isn't particular versatile. You have to choose periods for all of these Custom PCF % True Indicators. Then you have to figure out what percentage of the time they need to be true in order for requirements as a whole to be good enough to look at.

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Posted : Thursday, October 16, 2014 5:14:37 PM
Registered User
Joined: 10/7/2004
Posts: 74

thanks Bruce will look into the ideas you presented. WIll let you know if I find anything that could work.


Posted : Saturday, November 22, 2014 4:30:25 PM
Registered User
Joined: 10/7/2004
Posts: 74

Bruce, I've been looking at this for a while and, because of you great analysis, I have a better understand on searching for these set ups.The sucess or failure of this set up is predicated on the white space -distance the price is away from the 50dSMA and the duration of the whitespace. The failures occur if their isn't much white space and  you get a trigger, like you mentioned.

So I'm thinking that I need to create a scan for stocks with large whitespace over a period of time(days or weeks - TBD) and put these stocks into a watchlist, then include the indicator for the pullback criteria, then watch for the trigger - maybe on a chart with an indicator. Does this sound reasonable?



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