http://www.nxp.com/documents/data_sheet/BT137_SERIES.pdf
I have been playing around with this triac with 5vdc just to make sure I have it wired up right before hooking in the 120VAC.
I notice it only works if I use terminal 1 as the negative. If I use terminal 2 the gate won't trigger.
When I hook it up to AC will I use the neutral on Gate 1? Or will it matter?
Thank You
The gate needs to be triggered w.r.t. MT1, thats why the circuit symbol is drawn as
it is.
If you are not certain about how to connect it for mains use, don't guess, do
your research and be safe.
With DC you can connect it like an NPN switching transistor or like a PNP switching
transistor and it should trigger in either case. However unlike a transistor it will
not switch off till the main terminal current drops below a threshold...
I believe it should trigger either way. Figure 7 of the datasheet shows 4 different trigger currents. I think these are the four combinations of trigger current/voltage polarity and main-output current-voltage polarity. If you look at the [u]Wikipedia TRIAC Page[/u], they describe the 4 "quadrants" of operation.
I've used TRIACS a few times, and most of the time I just use the example circuits in the datasheet for the [u]Triac Driver optoisolator[/u] and it works every time!
I've thought about testing the circuit with 12VAC, but I never have... I just hold my breath, close my eyes, and hook up 120V. 
I just hold my breath, close my eyes, and hook up 120V
Suicidal much? I hope you are doing your testing using an isolation transformer. In that case, 12VAC (or any other AC voltage) that is isolated by a transformer is much safer.
I am a a qualified electrician so there is no need to be concerned for my safety. I am well aware of the dangers of 120vac. I have worked with Triacs before and I know what they do but it was in 1993 and I forgot a lot since then. Plus it was only 9VDC in that case. It amazes me the pure emotion attached to 120VAC. Some people dismiss it as harmless when it is certainly not, others treat it like it's 40,000V and it is not. Common sense takes you a long way when working with electricity 
Then again, I know a guy who's wrench exploded into his face resulting in the terminator look. 240VAC 50HZ 3-Phase in that case. Far as research goes....The reason I was asking is because what is happening in real life does not match the theory the research produced Which is why you go to someone with experience and ask Is it not?
Got this working, triggers fine on either side as designed. I guess the DC is just more picky although I cannot understand why it should be if it triggers in all 4 quads. My project is turning out awesome. just have to finish the switch mode power supply to drive it all without blowing everything up LOL. Then on to learning Eagle Cad or perhaps start with Fritzing. Thanks to those who helped me along the way so far. Is there a spot to post pics of completed projects and give shout outs to everyone who helped?
I am a a qualified electrician so there is no need to be concerned for my safety.
I never meant to insult you or imply that you were unqualified.
Newbies tend to overlook many things. Now if you took a 120V powered 'scope and started probing around the circuit, you could have a rude awakening. That's why I'm so cautious on my recommendations when it comes to AC work..
Fair enough