Ascending Triangle Pattern: Bullish Breakout In 4-Steps

Ascending triangles are consolidation rising triangle pattern patterns that form during uptrends most often. They form less frequently during downtrends, but may signal reversal (and perhaps even form longer-term bottoms) when they do. Ascending triangle chart patterns are common, recognizable, and reliable.

How to Trade an Ascending Triangle

• An ascending triangle breakout occurs when the price breaks out of the upper horizontal trendlines, signaling the completion of the pattern.
• Ascending triangle pattern is one of the three primary triangle patterns, along with the symmetrical triangle pattern and descending triangle pattern.
• There are no universally agreed-upon data on the success rate or failure rate of ascending triangle patterns.
• The ascending triangle pattern is msot reliable in bullish trending market conditions with prices moving in an upward direction.
• Free stock charting with proprietary trading tools and premium data.
• Wait for a breakout above the horizontal resistance line and consider a long position once it has been breached.

To confirm the breakout, we’re going to use the RSI tool which is a momentum-based indicator. To act as a continuation pattern within a downtrend, the upward-sloping trendline of the ascending triangle must be broken. The ascending triangle indicates the prevailing strength and interest of the bulls in the market. This, in turn, means a soon continuation of growth or its beginning. Another profitable strategy to trade ascending triangles is to set a perpendicular line and build a symmetrical triangle. The ascending triangle pattern is very similar to the rising wedge pattern, which is why many traders, especially beginners, confuse them.

It is recommended to use confirmation signals like volume and other technical indicators to strengthen the bullish bias signal from the ascending triangle. Meanwhile, the rising trendline below shows that buyers are becoming increasingly aggressive, and willing to buy at higher prices. In this case, we apply the same trading rules (entry and exit) as we would with the ascending triangle pattern within an uptrend. Often you’ll see the ascending wedge pattern which will break the resistance line but have no real momentum behind the breakout. Other times, the pattern will develop spiky bars that will lead to false breakouts. In trading, this model can be found relatively often in any financial market, including the cryptocurrency market, Forex, the stock, and commodity markets.

Technical indicators like moving averages and Bollinger Bands can provide extra validation. A successful retest of the breakout level turning into support strengthens confirmation. If the price struggles to break past the upper band, it might indicate a false breakout. To manage risk, set your stop loss slightly below the breakout level within the triangle.

Psychology of Ascending Triangle

Eventually, price breaks above resistance, in the same direction as the previous bullish trend. Filippo Ucchino started his trading career in Forex trading in 2005. He became an expert in financial technology and began offering advice in online trading, investing, and Fintech to friends and family. Filippo specializes in the best Forex brokers for beginners and professionals to help traders find the best trading solutions for their needs. He expands his analysis to stock brokers, crypto exchanges, social and copy trading platforms, Contract For Difference (CFD) brokers, options brokers, futures brokers, and Fintech products. The Ascending Triangle Pattern in Crypto trading exhibits heightened volatility and social media sensitivity, diverging from traditional market mechanics.

An ascending triangle pattern consists of several candlesticks that form a rising bottom and at least two to three peak levels that form a flat top due to horizontal resistance. The rising bottom is formed using trend lines connecting at least two to three higher lows. An ascending triangle is a bullish chart pattern that consists of an ascending support line and a horizontal resistance line. Price consolidates between a series of higher lows and repeating highs.

• A key difference between the ascending triangle and the symmetrical triangle is the nature of the trendlines.
• The ascending triangle pattern differences with a symmetrical triangle pattern are its shape and what it signals.
• Triangle patterns can provide great trading opportunities but require know-how to trade them properly which is why I decided to share some advanced trading tricks to gain an edge with triangles.
• After a price consolidation phase with tight volatility, there is a currency price breakout higher over the next few weeks.

Most technical analysts view this as a “continuation pattern,” meaning the overall market trend is likely to continue. As the price continues to oscillate between these two trendlines, it signifies a period of equilibrium between buyers and sellers. However, since the lower trendline is going upwards, it suggests that buyers are gradually gaining control, pushing the price higher over time. What we want to see is momentum decreasing after each successive retest of the flat resistance level. We look to see a bearish divergence developing on the RSI indicator. The triangle chart pattern is generally considered a bullish pattern.

Understanding the broader market context and being aware of potential news can enhance the effectiveness of this pattern. The ascending triangle, also known as the rising triangle and flat-top, is a continuation pattern that occurs within a trend. As the name suggests, an ascending triangle on a chart is formed when the price gathers between an ascending trend support line and a horizontal resistance line.

For more information on this pattern, read Encyclopedia of Chart Patterns,pictured on the right. Rising Triangle is knit flat, with a slipped stitch motif on a background of reverse stockinette stitch. The motif is based on our popular Rising Cowl, and the triangle was designed to show off our One Yarn custom-dyed yarn from Polka Dot Sheep. If you try to buy every swing high you can get stuck in a whipsaw when you’re trading this pattern.