Mastering the Golden Triangle Trading Strategy

Introduction

The Armchair Investor Golden Triangle™ setup, originally refined by Charlotte Hudgin, is a powerful variation of the classic buy-the-dip strategy. It combines breakout recognition with volume confirmation to identify high-probability, explosive price moves. In essence, the Golden Triangle Strategy comprises two closely related setups—Setup 1 and Setup 2—each with its own entry logic rooted in price structure and momentum.

In this post, I’ll demonstrate my use of ChatGPT to write a custom TradingView strategy script. I refined the script to automate both setups. You’ll also see how I added an intelligent trailing stop loss mechanism. It dynamically tightens after reaching specific profit thresholds. This maximizes gains while it protects capital.

For the original explanation of this pattern, you can visit: https://thepatternsite.com/GoldenTriangle.html

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I asked ChatGPT to generate the Pine Script for this strategy. To my surprise, it delivered the entire working script almost instantly. I was genuinely impressed by the speed and accuracy.
Below is the screenshot showing the exact prompt I used with ChatGPT.

🔺 Setup 1 – Golden Triangle Breakout

This setup identifies price compression in a triangle formation and prepares to act on the breakout. Here’s how it works:

• Price forms lower highs and higher lows (triangle shape).
• We detect this using pivot highs/lows over recent candles.
• The price must close above the triangle’s upper bound. It must also be above the 50 SMA. Then, we take a long entry.
• It’s a classic breakout setup supported by trend confirmation.

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🔵 Setup 2 – Price & Volume Confirmation

When triangle patterns aren’t visible, this volume-driven setup helps catch institutional accumulation:

• Price falls below the 50 SMA, then closes back above it (mean reversion).
• We need an up day (today’s close > yesterday’s).
• Volume must:
  • Be above the 50-day volume SMA
  • Exceed volume of each of the prior 4 bars
• Once confirmed, we take a long entry the next bar.

This setup avoids false SMA bounces by demanding strong volume support.

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📈 Entry Rules Summary

Setup	Entry Condition
Setup 1	Breakout above triangle + Close > 50 SMA
Setup 2	Up day + Close > 50 SMA + High volume vs 4 bars

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🛑 Exit Strategy: Dynamic Trailing Stop Loss

This strategy uses a smart trailing stop that adapts based on performance:

• At entry, we start with a 6% trailing stop below the highest price reached.
• If profit exceeds 10%, the stop tightens to 5%.
• The trailing stop updates on every bar as the trade moves in your favor.
• If price dips below the trailing stop, the position is exited automatically.

🎯 This ensures we stay in winning trades longer and protect gains effectively.

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🧠 Bonus: Weekly Fibonacci Pivot Levels

To add confluence zones for support/resistance:

• We calculate weekly Fib R3 and S3 levels.
• These are plotted and update weekly to act as reversal or breakout targets.
• You can use them for partial exits, re-entries, or trade filters.

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🌿 Visual Cues

• Green background when in an active long trade.
• Red/Blue lines for trailing stop of Setup 1 & 2.
• Live dashboard showing SMA values and signal status.
• Markers show Setup 1 (green triangle) and Setup 2 (blue circle) entries.

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🛠️ Built With:

• TradingView’s Pine Script v5
• Live-tested on 1H timeframe
• Clean structure, optimized for low-lag setups

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💬 Final Thoughts

This strategy gives you two robust entry signals and protects your profits with a tight but intelligent exit mechanism. Perfect for intraday swing traders, it balances structure with flexibility.

You can find the code at TradingView under my strategies: search for Golden Triangle Strategy (1H, Setup 1 & 2)