![]() In an ascending triangle, buyers continue to get more aggressive over time – resulting in a rising lower trendline as subsequent lows increase – until they eventually win out over bearish traders and the stock price breaks out. In symmetrical triangles, both bullish and bearish traders are evening out and testing the price of a stock following a significant price trend until eventually either bulls or bears win out – with the result usually following the lead of the previous trend. Triangle patterns work because they represent underlying patterns of consolidation (symmetrical triangles), accumulation (ascending triangles), or distribution (descending triangles). However, triangle patterns can also be observed and used for trading on shorter timescales, although doing so leaves the drawing of the triangle patterns up to a greater degree of interpretation. ![]() For example, strong triangle patterns on daily chart require a prior trend that is at least a few months old and typically develop for several months before a breakout occurs. Triangle patterns are most commonly applied on daily charts and interpreted over a period of several months. Symmetrical triangles are a sign of consolidation and usually result in a continuation of the prior trend, although they can also indicate reversals. Symmetrical triangles have descending highs and ascending lows such that both the upper and lower trendlines are angled towards the triangle’s apex. Descending triangles have a falling upper trendline as a result of distribution and are always considered bearish signals. Ascending triangles have a rising lower trendline as a result of accumulation and are always considered bullish signals regardless of whether they form after an uptrend or downtrend. Ascending and Descending TrianglesĪscending and descending triangle patterns are right-angle triangles in that the line extending along two or more lows or two or more highs, respectively, is horizontal. Triangle patterns come in three varieties – ascending, descending, and symmetrical – although all three types of triangles are interpreted similarly. Triangle PatternsĪ triangle pattern forms when a stock’s trading range narrows following an uptrend or downtrend, usually indicating a consolidation, accumulation, or distribution before a continuation or reversal. ![]() Although triangles more frequently predict a continuation of the previous trend, it is essential for traders to watch for a breakout of the triangle before acting on this chart pattern. Unlike other chart patterns, which signal a clear directionality to the forthcoming price movement, triangle patterns can anticipate either a continuation of the previous trend or a reversal. Triangle patterns are a chart pattern commonly identified by traders when a stock price’s trading range narrows following an uptrend or downtrend.
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