An ascending triangle pattern is a technical analysis map pattern. It is formed by market movements that allow for drawing a horizontal line along with the swing highs and an increasing trendline along with the swing lows.

The Ascending Triangle Pattern in Forex

Two lines form a triangle. Traders are still on the lookout for breakouts from triangle trends. A breakout will happen either to the upside or to the downside. Ascending triangles are known as continuity trends since the price usually breaks out in the same direction as the trend that existed right before the triangle formed.

An ascending triangle can be traded since it has a specified entry point, benefit goal, and stop-loss level.

Meaning of Ascending Triangle

An ascending triangle is usually called a continuation sequence, which means it is important if it appears in an uptrend or downtrend. Traders choose to actively purchase or sell the asset after the triangle has broken out, depending on which way the market has broken out.

If the price falls out of the trend, the increasing volume helps validate the breakup because it indicates the interest.

The ascending triangle’s trend lines would have a minimum of two swing tops and two swing lows. A higher number of trendline contacts, on the other hand, continues to yield more consistent trading returns.

Since the trendlines are convergent, the price movement would become more coiled if the market remains in a triangle for many moves, indicating a greater potential breakout.

During trending cycles, volume is higher than during consolidation periods. Because a triangle is a form of consolidation, the volume appears to compress throughout an ascending triangle. As previously said, traders search for increased volume on a breakout because it indicates that the market is expected to continue in the breakout direction.

When the price breaks out on low volume, it indicates that the breakout isn’t very solid. This may indicate that the price would return to the trend. This is referred to as a “false breakout”.

When the price breaks out, an entry is usually taken for trading purposes. If the breakout is upside, buy; if the breakout is to the downside, short/sell.

A stop-loss is located just beyond the pattern’s opposite hand. A stop loss is put just below the lower trendline if a long trade is made on an upside breakout, for instance.

Difference Between a Descending and an Ascending Triangle

Both of these triangles are continuity forms, but they have a distinct appearance. The lower trendline of the descending triangle is horizontal, while the higher trendline is descending.

The ascending triangle, which has a rising lower trendline and a horizontal upper trendline, is the polar opposite.

Identifying an Ascending Triangle Pattern on Forex Charts

When traders know what to watch for, the ascending triangle is easy to find on Forex charts.

• Uptrend: Before the ascending triangle arises, the stock must be in an uptrend. This is important because it emphasizes the importance of traders not merely trading the ascending triangle as it appears.
• Consolidation: As the industry reaches the consolidation process, the ascending triangle begins to take shape.
• Growing lower trendline: A rising trendline can be drawn by linking the lows when the market is consolidating. This ascending trendline indicates that buyers are gradually pushing the price higher, adding to the bullish trading bias.
• Flat upper trendline: The upper trendline is flat and serves as resistance. This level is frequently approached by price, which bounces off until a breakout occurs.
• Trend continuation: Traders will look for confirmation of the pattern via continued upward momentum after the price makes a strong break above the upper trendline.

Measuring the Ascending Triangle

The ascending triangle has a built-in calculating method that can be used to estimate possible taking benefit goals. Traders will calculate the distance from the pattern’s origin, at the lowest point of the rising trendline, to the flat support line for the ascending triangle.

Later on, beginning from the breakout point and stopping at the future taking advantage, the same gap can be transposed.

Limits in Trading the Ascending Triangle 

The key issue with triangles, and chart trends in general, is that false breakouts will occur. The price can break out of the trend to return to it later, or it may even break out on the other hand.

As the price edges past the trendlines but struggles to produce any traction in the breakout direction, a pattern may need to be redrawn multiple times.

Though ascending triangles give you a benefit goal, it’s just an approximation. The price may far surpass or fall short of that goal.