Sep-12-2024
The ascending triangle is a chart pattern that’s created when a horizontal set of highs is met by an ascending set of lows. The upper horizontal line is the resistance level, and the lower upward sloping line is support.
It is a continuation pattern, usually appearing after an uptrend. Over the course of the pattern, the market consolidates (which means the trend stalls), but if it breaks out above the resistance line, then a new uptrend should form.
As we’ll cover below, traders usually look to confirm a pattern before they start trading. One way to confirm an ascending triangle is to look at volume indicators – activity should decline within the pattern, but then quickly pick up as the breakout takes hold. If this arises, then the price is more likely to continue upwards.
Although the price does typically break out in the same direction as the prevailing trend, it doesn’t always happen. Ascending triangles can also indicate the start of a downtrend if price breaks lower or volume declines.
