Acending triangle pattern
I'm posting these again because there are so many new traders here 🤙
Take it with a grain of salt. If it works for you, great! Just remember, five different people can look at that chart and see five different things 😂
Take it with a grain of salt. If it works for you, great! Just remember, five different people can look at that chart and see five different things 😂
The Ascending Triangle
January 30, 2021
What is an Ascending Triangle formation?
Like many of the patterns we have explored, the ascending triangle is often regarded as a continuation pattern. The formation shows a period of consolidation before a breakout.
This pattern is created when the following occur:
Price action allows for a horizontal trend line to be drawn attaching at LEAST two highs.
A trend line can be drawn along at LEAST two lows
Traders watch for breakouts along the upside of the ascending triangle because the breakout generally occurs in the direction of the trend.
What is an Ascending Triangle actually telling us?
The buyers are still in control. The price continues to return to the previous high. More important is the continuation of the higher lows. This shows seller enthusiasm waning and buyers regaining the upper hand.
Trading with the Ascending Triangle
Most traders use an upside breakout of an ascending triangle as a signal to go long and a downside breakout as the signal to short.
A stop-loss can be set just under the trend line after a breakout if going long and just above the bottom trendline if short.
Target price can be established by adding(or subtracting if short) the max height of the triangle to the breakout.
The angle of the triangle is critical. The steeper the angle the more abrupt the breakout can occur.
© Stock Scalpers
Virginia Beach, Virginia
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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