The 3 Bar Triangle indicator by Linda Raschke identifies a consolidation pattern where price contracts within a narrowing range, forming a "triangle" shape over three bars. This pattern signals market "coiling," indicating potential for a sharp breakout in either direction once price moves beyond the triangle boundaries. Traders use this indicator to time entries by watching for a breakout above the pattern’s high or below its low, which suggests the direction of the next price move. Risk management involves placing stop-loss orders just outside the opposite side of the triangle to limit potential losses. Profit targets are often set based on the size of the triangle, aiming for a price movement equal to the distance between the high and low of the initial bar. This indicator supports breakout trading strategies by highlighting periods of price squeezing and potential volatility expansion.