An ascending triangle is a chart pattern created with a horizontal line and a rising trendine combined together to create a triangle. These are also called continuation pattern as generally the price will typically breakout in the same direction as the trend it was in before the triangle formation.

Identification: An ascending triangle is a pattern created by a horizontal line along the swing highs and a rising trendline along the swing lows.

Occurrence: This triangle occurs if the trendline runs along at least two swings lows and the horizontal line along two highs.

Study: The price will breakout preferably in the same direction as that of the trend before the pattern occurrence. However, a breakout in any direction is noteworthy. A stop loss is typically placed just outside the pattern on the opposite side from the breakout with a profit target being calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point.

By finlabs

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