Learn Ascending, Decending and Symmetrical Triangles | Powerful

١٤ يناير

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Hey traders,

In this post, we will discuss 3 simple and profitable types of a triangle pattern.

1️⃣ The first type of triangle is called a descending triangle.
It is a reversal price action pattern that quite accurately indicates the exhaustion of a bullish trend.

Setting a new higher high the market retraces and sets a higher low, then bulls start pushing again but are not able to retest a current high and instead the price sets a lower high and drops to the level of the last higher low setting an equal low.

Multiple lower highs compose a horizontal support that is called a neckline.

The price keeps trading in such a manner, setting lower highs and equal lows till the price sets a new lower low.
Most of the time, it gives a very accurate signal of a coming bearish move.

Please, note that a triangle formation by itself does not give an accurate short signal. The trigger that you should wait for is a formation of a new lower low.



Take a look at a descending triangle formation that I spotted on Crude Oil on a 4H time frame. Bearish movement was confirmed after a breakout of the neckline of the pattern.

2️⃣ The second type of triangle is called a symmetrical triangle. It is a classic indecision pattern. It can be formed in a bullish, bearish trend, or sideways market.

The price action starts contracting within a narrowing range, setting lower highs and higher lows.
Based on them, two trend lines can be drawn.

Breakout of one of the trend lines with a quite high probability indicates a future direction of the market.



Above is a great example of a symmetrical triangle.
Bullish breakout of its upper boundary - a falling trend line was a strong bullish confirmation.

3️⃣ The third type of triangle is called an ascending triangle.
It is a reversal price action pattern that quite accurately indicates the exhaustion of a bearish trend.

Setting a new lower low, the market retraces and sets a lower high, then bears start pushing again but are not able to retest a current low and instead the price sets a higher low and bounces to the level of the last lower high setting an equal high.

A sequence of equal highs compose a strong horizontal resistance that is called a neckline.

The price keeps trading in such a manner, setting higher lows and equal highs till the price sets a new higher high.
Most of the time, it gives a very accurate signal of a coming bullish move.

📍Please, note that an ascending triangle formation by itself does not give an accurate long signal. The trigger that you should wait for is a formation of a new higher high.



Ascending triangle formation helped me to accurately predict a bullish reversal on USDJPY. Its neckline breakout was a strong bullish confirmation.

Learn to recognize such triangles and you will see how accurate they are.

Let me know what pattern do you want to learn in the next post?

١٧ يناير

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