Classic Pattern - Ascending Triangles and Descending Triangles

Ascending Triangles

Ascending Triangles form when prices attempt to make higher highs and lower lows suggesting a bullish price trend. The Ascending triangle is bound by two trendlines: a horizontal line at the top and an upward slope trend line connecting the lower lows. Ascending triangles"form in any market and are quite reliable. The Triangle prices must intersect the trend lines at least twice (each) before the pattern is complete. Usually at the third or fourth attempt to trade outside the top trend line results in a breakout. Breakouts occur near the apex of the triangle.



This pattern has a high success rate as it meets its target about 75% of the time.

Trade: Trade a clear breakout of the top trend line. Enter a long trade one tick above the high of the breakout bar.

Target: Ascending triangles have excellent success in reaching target areas. The usual target would be the depth of the Triangle. Measure the distance (depth) between the top trend line and lowest of the upward slope trend line. Add this depth to the breakout point from the top of the trend line. Targets are also set at 50% of depth level for partial exits.

Stop: Place a stop order when the price closes below the low of the lower trend line or a major swing low.

Descending Triangles

Descending Triangles are similar to Ascending Triangles formation rules except they are bearish. Descending triangles form in bear markets and favor breakdowns. A descending triangle is bound by two trend lines connecting a downward slope trend line and a flat trend line connecting the lows of the pattern. Trades usually occur near the apex as the price closes outside the bottom trend line suggesting a breakdown. The price must intersect trend lines at least twice before the pattern emerges. Like the Ascending triangles, Descending Triangles also have a high success rate.

Trade: Trade one tick below the low of the breakdown bar (outside of the triangle).

Target: Descending triangles have similar targets like Ascending triangles. Measure Triangle depth at the lowest and highest points and set targets at 50% and 100% range from the breakdown point.

Stop: Place a stop order outside the downward slope trend line. If price closes above the top trend line, exit the trade.