Ascending Triangle (Or Rising Triangle)
Updated on March 9, 2023
The Ascending Triangle (also known as a Rising Triangle) is a chart pattern that forms in an uptrend when the price of an asset moves higher and encounters resistance, resulting in a series of lower highs. At the same time, the support level for the asset remains constant, creating a rising trend line that intersects the resistance level. The pattern is formed by two converging trend lines and is considered a bullish pattern, as it suggests that the price of the asset is likely to break through the resistance level and move higher. Traders often watch for a break above the resistance level and a subsequent increase in volume as a sign of a potential trend reversal.
Difference between ascending triangle and descending triangle
Ascending Triangle –
Price action forms a horizontal resistance level
Uptrending support line
Suggests a bullish breakout is likely
Descending Triangle –
Price action forms a horizontal support level
Downtrending resistance line
Suggests a bearish breakdown is likely.
How to trade using ascending triangle?
Traders can use the following steps to trade using the ascending triangle pattern,
Identify the pattern – Look for a stock or security that forms a horizontal resistance level and an uptrending support line.
Confirm the pattern – Wait for price action to confirm the pattern by testing the resistance level multiple times without breaking it.
Place a long position – Once the pattern is confirmed, place a long (buy) position at or near the support line with a stop-loss below the support line.
Set profit target – Set a profit target at or near the resistance level, or use a trailing stop-loss to lock in profits as the price moves in your favor.