What it means
A triangle is a narrowing range drawn with two converging lines. Ascending: flat top, rising lows. Descending: falling highs, flat bottom. Symmetrical: falling highs and rising lows.
Why traders use it
Narrowing ranges show compression. An ascending triangle shows buyers stepping in higher each time against fixed supply; a descending one the opposite.
Chart examples
Ascending triangle
Symmetrical triangle
How to identify it objectively
- 1At least two touches on each boundary.
- 2Lines drawn through swing points, not through every wick.
- 3Breakout = close beyond a boundary.
- 4Target = triangle height at its widest, projected from the break.
Bullish use
- 1Ascending triangle in an uptrend.
- 2Close above the flat top.
- 3Stop below the last higher low.
Bearish use
- 1Descending triangle in a downtrend.
- 2Close below the flat bottom.
- 3Stop above the last lower high.
What confirms it
- A close beyond the boundary with a strong body.
- Breakout in the prior trend direction.
What invalidates it
- A close back inside the triangle.
- Breakout near the apex with no momentum.
How a hypothetical setup is built
Entry
On the breakout close or retest.
Stop
Inside the triangle, beyond the last swing.
Target
The widest height projected from the break.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- Chart PatternsRising and Falling Wedges
- Chart PatternsBull and Bear Flags (and Pennants)
- Chart PatternsBreakout and Retest
Historical testing
Not tested on The Tradeskill.
Limitations: when it fails
- Boundaries can be drawn many ways.
- Flat tops are equal highs, which often get swept.
- Symmetrical triangles have no inherent direction.
Knowledge check
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