Ascending triangles are most reliable during uptrends in the market. The duration of the pattern can be anywhere from a few weeks to many months. You might see the volume contract, and then expand during the breakout—though this doesn’t always happen to confirm the breakout. If you’re still looking for a trusted source to get your price charts, TradingView is the solution! Most of the charts you can see on the website come from there. They let you freely chart almost any asset with all indicators you could think about.

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.

Although both patterns serve the same function but mostly ascending triangle is considered more of a trend continuation, the rising wedge is thought of as a reversal pattern. Typically, an ascending triangle is formed on an uptrend, thereby continuing the direction of price movement. Therefore, do not be surprised if you come across an ascending triangle description as a trend continuation pattern. But sometimes, it happens that a pattern appears after a downtrend, thereby reversing the price. Therefore, it is better not to classify the figure as relative but to classify it as absolute (i.e., rise, fall). Many technical analysts trade the breakout without first taking the time to understand what goes behind the scene.

How to trade a Rising Wedge classical pattern?

As with most technical analysis patterns, we can trade either a breakout or a pullback with the ascending triangle. Stop-loss is set immediately behind the level or trend line. If it appears during a long-term uptrend, it is usually taken as a signal of a possible market reversal and trend change. This pattern develops when a security’s price falls but then bounces off the supporting line and rises. This action confirms the descending triangle pattern’s indication that prices are headed lower.

For trading purposes, an entry is typically taken when the price breaks out. Buy if the breakout occurs to the upside, or short/sell if a breakout occurs to the downside. A stop loss is placed just outside the opposite side of the pattern. Volume tends to be stronger during trending periods than during consolidation periods. A triangle is a type of consolidation, and therefore volume tends to contract during an ascending triangle.

How to trade Ascending Triangle Pattern

Yes, the ascending triangle is a bullish chart pattern that develops during an uptrend and signals an upside breakout. The bullishness of this pattern comes from the squeeze between the ascending trendline and horizontal resistance line which ultimately will force the break out of the pattern. 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. 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. Conversely, a symmetrical triangle following a sustained bearish trend should be monitored for an upside breakout indication of a bullish market reversal.

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• You have to be quick when the breakout happens … But you can’t be too early or you can risk getting faked out.
• If it develops within a downtrend it can be considered a bearish continuation pattern.
• It is this configuration formed by higher lows that forms the triangle and gives it a bullish characterization.
• This action confirms the descending triangle pattern’s indication that prices are headed lower.

Buy if the breakout happens to upside, or sell if it happens to the downside. Place a stop-loss just outside the opposite side of the pattern. For instance, if a long trade develops on an upside breakout, place a stop loss just below the lower trend line.

How Do You Trade the Ascending Triangle Chart Pattern?

Traders can estimate the profit target based on the height of the triangle added or subtracted from the breakout price. If the triangle is $10 high for instance, add $10 to the upside breakout point to get the price target. If the price is less than that, the profit target is the breakout point less of $10.

With the https://1investing.in/, 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. To find the profit target, simply take the high and the low of the ascending triangle formation and add that measurement to the breakout level. This will give you the ideal target for this continuation pattern.

One reply on “The Ascending and Descending Triangle”

The benefits with this approach are that you can place a tighter stop since you are closer to the demand line , This also gives you profit before the stock hits the high of the day. An ascending triangle is just that, a triangle that’s on the rise. The pattern is a continuation pattern of a bullish event that is taking a breather as the security attempts to climb higher. Because of its shape, the pattern can also be referred to as a right-angle triangle.

Price typically breakout in the direction of the prevailing trend. The resistance level can be a line, or it can be a region as well. I like to wait for a key pivot point resistance level to be breached and then place a buy order slightly above this level.

The pattern of the ascending triangle indicates that the buyers are more aggressive than the sellers as the price continues to make higher lows. The pattern completes itself when the price breaks out of the triangle in the direction of the overall trend. In most instances, an ascending triangle is valid if it has good oscillation between the two lines. Each of the lines must have been touched at least once to validate the pattern.

Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow. Next, we’ll jump to a simple breakout trading strategy that will teach you how to identify and trade the ascending triangle formation. To act as a continuation pattern within a downtrend, the upward sloping trendline of the ascending triangle must be broken. The ascending triangle formation is a continuation pattern and as the name suggests it has the shape of a triangle. The ascending triangle is also known as the bullish triangle because it leads to a bullish breakout. But RENN did manage to break out of a descending triangle pattern.

How to Trade the Ascending Triangle

Get your trading evaluated and become a Forex funded account trader. If you want to receive an invitation to our live webinars, trading ideas, trading strategy, and high-quality forex articles, signup for Relevant Cost Definition ourNewsletter. Don’t forget to read this article on symmetrical triangle trading. We already have so many confluence factors that confirm the breakout that it’s useless to wait for more confirmation.

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 minimum of two swing highs and two swing lows are required to form the ascending triangle’s trendlines. But a greater number of trendline touches tends to produce more reliable trading results. Yes, in some instances a breakout of the ascending trendline can produce a bearish signal. However, generally, the ascending triangle is a bullish price formation that occurs within an uptrend.