How to Trade the Ascending Triangle Pattern

Full BioSuzanne is a content ascending triangle patterner, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands. Larry Swing is the CEO of MrSwing.com, a day trading website focused on swing trading. We use the information you provide to contact you about your membership with us and to provide you with relevant content. Get ready to receive cutting-edge analysis, top-notch education, and actionable tips straight to your inbox. Wait for the breakout to occur and place a buying order when the first candle following the breakout closes above the upper line .

These higher lows indicate that the bulls are gaining strength which presents you with a possible buying opportunity. This lesson will show you two ways to trade using ascending triangles. Traders should look for an established uptrend, multiple touches on the top trendline by minor highs, and the bottom trendline by minor lows for the Ascending Triangle Pattern. The pullback/throwback rate for an ascending triangle pattern is typically high, and traders should keep an eye for it when considering entry and exit points.

The ascending trend line chart pattern is a bullish formation. It signals that the market is consolidating after an uptrend, with the buyers still in control. The occurrence of the higher lows is pointing toward a likely breakout as the wedge narrows down. Its important to note that finding the perfect symmetrical triangle is extremely rare and that traders should not be too hasty to invalidate imperfect patterns. Traders ought to understand that triangle analysis is less about finding the perfect pattern and more about understanding what the market is communicating, through price action. Triangle patterns have three main variations and appear frequently in the forex market.

So, in a downtrend, the resistance level has a bigger chance to hold while the support level gets broken. In this guide, you’ll learn how to place a trade using the ascending triangle pattern. This is a breakout trading strategy that has the advantage of highlighting breakouts in advance. All you need to do is to learn the right trading technique and you’ll be able to recognize in real-time the anatomy of trading breakouts. There are several continuation patterns, including the ascending triangle, that technical analysts use as signals that the existing price trend will likely continue. Other examples of continuation patterns include flags, pennants, and rectangles.

Conversely, a symmetrical triangle following a sustained bearish trend should be monitored for an upside breakout indication of a bullish market reversal. Both of these triangles are continuation patterns, except they look differently. The descending triangle has a horizontal lower line, while the upper trend line is descending. This is the opposite of the ascending triangle which has a rising lower trend line and a horizontal upper trend line. When trading the ascending triangle, traders need to identify the uptrend. Soon afterwards, the ascending triangle appears as the forex candlesticks begin to consolidate.

Ascending Triangle Pattern Examples

If the price is less than that, the profit target is the breakout point less of $10. The location of the ascending triangle in relation to the trend is important. It will determine if there will be a continuation or a reversal in the trend. It is possible for the ascending triangle to appear at the bottom of a downtrend. This means that the downward momentum is fading before it changes direction. It would help if you bought the breakout of the horizontal resistance trendline.

Don’t forget to read this article on symmetrical triangle trading. The last step is to define our entry trigger point and measure our profit targets. If we have a prior uptrend, it suggests that the breakout has a higher probability to happen on the upside. Once the triangle breakout happens we need to see a pick-up in volume that will result in a nice long trade.

One advantage of this type of continuation play is that you’ve got to use a very tight stop loss. Naturally, the stop loss goes above the flat resistance line. This shows that the market has tried multiple times to break the resistance top but it couldn’t. The stock advanced to 30.75 before pulling back to around 26.

The Head and Shoulders Pattern: How to Trade Tops and Bottoms

As you probably guessed, descending triangles are the exact opposite of ascending triangles (we knew you were smart!). The Head and shoulders pattern is a reversal trading strategy, which can develop at the end of bullish or bearish trends. It is often referred to as an inverted head and shoulders pattern in… Price bounces between two converging trendlines, the top one is horizontal and the bottom one slopes upward. Figure 4 shows the short entry was made when the price broke the lower trendline at 786.0, on the close of the bar that broke the trendline. It only took six hours to reach the target, compared to the several days that it took for the pattern to form before the breakdown.

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Next, we’ll jump to a simple breakout trading strategy that will teach you how to identify and trade the ascending triangle formation. Unlike in an uptrend, when the ascending triangle pattern develops within a downtrend it’s more likely to signal a reversal than a continuation. The blue vertical trend line is a copy of the distance when the triangle was first formed – when two trend lines were identified. The upper end of the trend line tells us where we should consider taking our profits off the table i.e. where the ascending triangle pattern is completed. The bulls are in full control of the price action, as they have been successful in pushing the market higher. In an ascending triangle pattern, the upward-sloping lower trendline indicates support, while the horizontal upper bound of the triangle represents resistance.

quiz: Understanding inverse head and shoulders chart pattern

You can find the bottom when the stock price makes a strong push back toward resistance. First, there will be a big run-up, almost like the pole on a bull flag setup. That’s part of what distinguishes an ascending triangle from a bull flag. If you’re already long a trade or looking to get into a breakout, this pattern is a great indicator of strength.

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There was a brief dip under the support level, so it’s not perfect. There are also symmetrical triangles, descending triangles, wedges, and bull flags. It’s difficult to build a screener to find intraday ascending triangle patterns. After viewing a strong break above resistance, traders can enter a long position, setting a stop at the recent swing low and take profit target in line with the measuring technique.

When the two lines get closer to one another, the likelihood of a breakout increases. Finally, the USD/CHF buyers are able to push the market outside of the consolidation phase in a clear and strong breakout. Wide patterns like this present a higher risk/reward than patterns that get substantially narrower as time goes on.

Many technical analysts trade the breakout without first taking the time to understand what goes behind the scene. With the ascending triangle, we can have a perfect head start, and see the trading opportunity before it happens. So, being able to recognize the ascending triangle pattern can be a valuable tool that you can use to identify profitable trades. If the triangle pattern is inside of a big trading range, then the solid resistance level might not be that significant. However, if the ascending triangle price formation develops in the middle of a bullish trend, that would add more weight to the pattern. The top of the ascending triangle pattern can hold because the prevailing trend is downward.

How to Trade The Ascending Triangle Pattern

Hi friends i’ll share with you some price action patterns you should know . I would like to post this in steps so that you can understand more and make things clear . 1- ascending triangle generally happens in an uptrend and is a bullish pattern , you can set your order after the breakout of the horizontal… A rising wedge is often considered a bearish chart pattern that points to a reversal after a bull trend. A rising wedge is believed to signal an imminent breakout to the downside. Like other wedges, the pattern begins wide towards the bottom and contracts as the price moves higher and the trading range narrows.

I think using https://g-markets.net/sToTrade every day is one of the best things that you can do to help your trading. There are tons of features, including beautiful charts, built-in scans, indicators, and so much more. Ascending triangle breakouts aren’t the only kind of triangle breakouts. You have to be quick when the breakout happens … But you can’t be too early or you can risk getting faked out. Now, if it falls all the way back to the first low, it’s in a channel.

Traders can once again measure the vertical distance at the beginning of the triangle formation and use it at the breakout to forecast the take profit level. In this example, a rather tight stop can be placed at the recent swing low to mitigate downside risk. The difference between the symmetrical and the other triangle patterns is that the symmetrical triangle is a neutral pattern and does not lean in any direction. While the triangle itself is neutral, it still favors the direction of the existing trend and traders look for breakouts in the direction of the trend. This article makes use of line chart illustrations to present the three triangle chart patterns.

For the ascending triangle,traders can measure the distance from the start of the pattern, at the lowest point of the rising trendline to the flat support line. That same distance can be transposed later on, starting from the breakout point and ending at the potential take profit level. If a symmetrical triangle follows a bullish trend, watch carefully for a breakout below the ascending support line, which would indicate a market reversal to a downtrend.

What we want to see is momentum decreasing after each successive retest of the flat resistance level. We look to see a bearish divergence developing on the RSI indicator. Primus Telecom formed an ascending triangle over a 6-month period before breaking resistance with an expansion of volume.