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Ascending Triangle Pattern

The ascending triangle is a price consolidation pattern formed between two trend lines, with the upper line horizontal and the lower line rising. At least two minor highs and lows must occur within the pattern. It usually breaks upward at the end, though it can also break down. Over 60% of ascending triangles continue the existing trend upward after breaking out.

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Hammad Saeedi
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462 views2 pages

Ascending Triangle Pattern

The ascending triangle is a price consolidation pattern formed between two trend lines, with the upper line horizontal and the lower line rising. At least two minor highs and lows must occur within the pattern. It usually breaks upward at the end, though it can also break down. Over 60% of ascending triangles continue the existing trend upward after breaking out.

Uploaded by

Hammad Saeedi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

 

The  ascending  triangle  is  a  price  consolidation  pattern  after  a  bullish  or  bearish  move  in  the 

price.  It  is  formed  between  two  trend  lines where the upper trend line should be horizontal and 

the  lower  trend  line  slopes up and meets the horizontal trend line at some point. The ascending 

triangle  starts  wider  like  a  usual  triangle  and  then  contracts  as  it  moves  towards  its  end. Price 

should  make  at  least  two 

minor  highs  and  two  minor 

lows  within  the  triangle. This 

pattern  can be formed after a 

downtrend  or  uptrend  and  it 

usually  breaks  upward. 

Although  it  can  break  down 

as  well,  the  odds  of  breaking 

up  are  higher  than  breaking 

down.   

One  of  the  major  reasons  for  this  formation  is  a  big  investor  who  has  spotted  a  better 

opportunity  and  wants  to  exit  from  a  current  asset  at  a  price  not  lower  than  e.g.  $20.  He  will 

keep  selling  slowly  whenever it reaches that price over and over while other investors still see a 

potential in the asset and keep buying it on every drop after making a minor high.  

Let’s summarize the requirement of this pattern. 

● The pattern can be formed after a bear or bullish move both 

● The price consolidates between a flat and rising trend line 

● The pattern starts wider and contracts afterward 


● The price should make at least two minor highs and two minor lows 

● The  volume  decreases  during  the  formation  of  the  triangle  and  spikes  up  during 

breakout 

Statistics 

It  is  always  interesting  to  know  the past performance of the pattern to adjust your position size 

and  SL accordingly. A study suggests that 62% of the time this pattern makes a bullish exit and 

75%  of  the  cases this pattern works as a price continuation pattern. The study further suggests 

that  75%  of  the  cases  price  reaches  the  first  target  after  a  breakout  and 60% of the time price 

makes a throwback on the trend line.  

Trading an ascending triangle 

As  an  ascending  triangle  pattern  is  a continuation pattern, it gives you the ability to long or buy 

the  asset  after  its  breakout.  You  can  enter  on  the  breakout  or  on  throwback  if  you  missed  the 

initial  chance  of  entering.  Your  first  profit  target  will  be  equal  to  the  size  of  the  triangle  as 

shown  in  the  chart  above.  You  can  use  Fibonacci  levels  to  measure  the  further  profit  targets 

and also make sure to place the stop loss below the lower trend line of the triangle.  

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