Ascending Triangle – Trading Bullish Breakouts

The difference though is that trend resumes after the pattern without any major breakout.

This triangle represented a consolidation within an uptrend. Enter your email below: 

At least two reaction lows are required to form the lower ascending trend line. Looking at this daily logarithmic scale chart, we can see that a similar correction from January to August was already in , so we would not be surprised if the cycle this year is repeated.

Triangular Bullish Breakout Patterns 

The horizontal ascending triangle is classically a bullish signal. On longer period charts the rising wedge is typically seen as a bearish formation – it’s the exhaustion phase of an uptrend as volume and momentum dwindles.

Let's examine each individual part of the pattern and then look at an example. In order to qualify as a continuation pattern, an established trend should exist. However, because the ascending triangle is a bullish pattern, the length and duration of the current trend is not as important as the robustness of the formation, which is paramount.

At least 2 reaction highs are required to form the top horizontal line. The highs do not have to be exact, but they should be within reasonable proximity of each other. There should be some distance between the highs, and a reaction low between them. Lower Ascending Trend Line: At least two reaction lows are required to form the lower ascending trend line.

These reaction lows should be successively higher, and there should be some distance between the lows. If a more recent reaction low is equal to or less than the previous reaction low, then the ascending triangle is not valid. The length of the pattern can range from a few weeks to many months with the average pattern lasting from months. As the pattern develops, volume usually contracts. When the upside breakout occurs, there should be an expansion of volume to confirm the breakout.

While volume confirmation is preferred, it is not always necessary. A basic tenet of technical analysis is that resistance turns into support and vice versa. When the horizontal resistance line of the ascending triangle is broken, it turns into support. Sometimes there will be a return to this support level before the move begins in earnest. Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout.

When you are stalking patterns like this, always pay attention to the psychology behind not being able to break through that big support or resistance level on the third our fourth touch. Hanging around that level any longer can lead to pattern failure. Also notice the volume. A classical ascending or descending triangle will see the volume decrease as it moves towards the apex. Because the trader holding that big level decrease in number each time.

Eventually when there are no more buyers or sellers left to hold that line, it breaks and you get the expected move. We saw something very different here. At the end of the month you see an increase in volume at the lower right hand corner of the triangle signaling that there was more fight from the buyers, not less.

There are at least two O-Columns with the second column forming a higher low. Triangles can extend more than four columns as long as subsequent X-Columns continue forming lower highs and subsequent O-Columns form a higher low. Triangles are neutral patterns dependent on the breakout or breakdown for the signal. Note that a trendline break is not enough. The blue lines outline the triangle. Note that these lines do not appear on the chart. They were simply added to make the pattern more visible.

There were two O-Columns with higher lows and one X-Column with a lower high. This pattern turned bullish with the Double Top Breakout at This triangle represented a consolidation within an uptrend.

Even though such consolidations are typically continuation patterns, they are still dependent on a breakout before turning bullish.

 

Related Ideas 

The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns.

An ascending triangle is a bullish chart pattern used in technical analysis that is easily recognizable by the right triangle created by two trend lines. The triangle pattern was a signal that the price action is slowing down and a new move is about to come. The bullish triangle breakout hinted that the previous bullish move starts over again. Stop Loss and Targets of the Triangle Breakout Trade. I put my Stop Loss order below the lowest point of the triangle pattern. 

More Info

GET STARTED WITH THE FOREX TRADING ACADEMY

A Double Top Breakout signals a bullish resolution to the triangle pattern. Note that a trendline break is not enough. A basic P&F buy signal, such as a Double Top Breakout, is required to complete the triangle and trigger the bullish signal. The chart above shows Chesapeake Energy (CHK) with a triangle forming in After of break this triangle,if it can break, ADA have much strong resistance in its way that strongest is that black line i draw in my title chart and started from ADA last high simpsons-online.tk BTC if it can break that line too and confirm its break out then can say bear market of ADA ended for mid-term,but for now we can focus on this swing trade and .

Ascending triangle - bullish signal Rising wedge - bear signal. The targeted move for the reversal is measured from the lowest trough () to the highest peak. Some Descending Triangles Are Powerfully Bullish In the realm of technical analysis we normally think of the descending triangle pattern as being bearish. But if you believe taking a glance at the chart and labeling those squiggly lines “descending triangle” and playing for a bearish break is going to make you money, you’re missing the point.

More Info
© simpsons-online.tk 2018