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Table of Contents
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Symmetrical Triangle
The Symmetrical triangle is a continuation pattern, meaning if the trend was largely upwards, expect the triangle to breakout. To draw the Triangle it is necessary to have atleast 2 points for each Trend line
Volume diminishes as the pattern starts to form.
The Breakout
point occurs 1/2 to 3/4 of the way through the pattern's development or time-span. The time-span of the pattern can be measured from the apex (convergence of upper and lower lines) back to the beginning of the lower trend line (base). A break before the 1/2 way point might be premature and a break too close to the apex may be insignificant. After all, as the apex approaches, a breakout must occur sometime.
Price Target
There are two methods to estimate the extent of the move after the breakout. First, the widest distance of the symmetrical triangle can be measured and applied to the breakout point. Second, a trend line can be drawn parallel to the pattern's trend line that slopes (up or down) in the direction of the break. The extension of this line will mark a potential breakout target.
Ascending Triangle
The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. Regardless of where they form
Volume diminishes as the pattern forms.After breakout expect a return to support (now resistance) and then the market continues in the direction of the breakout.
Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout.
Descending Triangle
The decending Triangle is Bearish, however we require a prior trend to exist. After breakdown expect a return to support (now resistance) and then the market continues in the direction of the breakdown.Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and subtracting it from the resistance breakout.
References
Symmetrical Triangle : StockCharts
Ascending Triangle : StockCharts
Descending Triangle : StockCharts
