Educational point:
Triangles are similar to wedges and pennants and can be either a continuation pattern if validated, or a powerful reversal pattern, in the event of failure.
There are three potential triangle variations that can develop as price action carves out a holding pattern, namely ascending, descending, and symmetrical triangles.
Ascending triangle:
This pattern is formed when the upper trendline is horizontal and the lower trendline slopes up. It is typically seen as a bullish continuation pattern, meaning that the price will likely break out to the upside once the pattern completes.
Descending triangle:
This pattern is formed when the upper trendline slopes down and the lower trendline is horizontal. It is typically seen as a bearish continuation pattern, meaning that the price will likely break down to the downside once the pattern completes.
Symmetrical triangle: This pattern is formed when both the upper and lower trendlines slope towards a common point. It is a neutral pattern, meaning that the price is equally likely to break out to the upside or downside once the pattern completes.
Quiz:
How you can make money from a Neutral pattern?
Do not forget this pattern is NEUTRAL.
Triangles are similar to wedges and pennants and can be either a continuation pattern if validated, or a powerful reversal pattern, in the event of failure.
There are three potential triangle variations that can develop as price action carves out a holding pattern, namely ascending, descending, and symmetrical triangles.
Ascending triangle:
This pattern is formed when the upper trendline is horizontal and the lower trendline slopes up. It is typically seen as a bullish continuation pattern, meaning that the price will likely break out to the upside once the pattern completes.
Descending triangle:
This pattern is formed when the upper trendline slopes down and the lower trendline is horizontal. It is typically seen as a bearish continuation pattern, meaning that the price will likely break down to the downside once the pattern completes.
Symmetrical triangle: This pattern is formed when both the upper and lower trendlines slope towards a common point. It is a neutral pattern, meaning that the price is equally likely to break out to the upside or downside once the pattern completes.
Quiz:
How you can make money from a Neutral pattern?
Do not forget this pattern is NEUTRAL.