The way that we trade an ascending triangle pattern is to enter a long position as price breaks out above the resistance level with a stop-loss set below the level of resistance (or more conservatively, below the line of support). It is important to understand that the breakout can occur before price reaches the apex of the triangle, as has happened in the provided example. We shall anticipate a breakout event to occur, as the support and resistance lines converge. Without this volume behavior, we will have a far lower rate of success from trading this pattern. When anticipating going long based on an ascending triangle chart pattern, we want to see an increase of trading volume immediately before and during the anticipated breakout through the horizontal resistance level. Ascending triangles are generally a bullish continuation chart pattern, which means we anticipate long entry trading opportunities, with a higher probability, than we do short. Even though these patterns generally offer us an idea of whether to expect price to move higher, or lower, we need to be flexible and ready to make trading decisions, based on the resulting price action as opposed to what we think should happen.Īs the name suggests, the ascending triangle looks like a triangle, with a horizontal resistance level, and an ascending line of support. When we have the probabilities in our favor, and we act with consistency, we can expect to profit over a series of many trades. What these chart patterns offer us are scenarios in which we have the odds in our favor, and we have a higher probability of one outcome occurring over another. As is the case with all of the following charting patterns, or any trading strategy for that matter, there is no guarantee that we are ever going to experience a winning trade. It is important to note that no chart pattern has a 100% rate of success. Finally, I will offer logical places to enter positions and set your stop-losses when trading based on each of these patterns. I’m going to explain the importance of trading volume within each pattern, and where we should anticipate it increasing and decreasing. Throughout this post, I am going to cover what each chart pattern looks like (with a provided example), whether each pattern is usually bullish, bearish, or neutral (and how this might affect your trading bias when you see them forming). I have developed the following resource for you to brush up on your technical chart pattern and price action knowledge! Many technical-based traders make a living exclusively by trading from charts by observing patterns and price action. Today we’re going to explore sixteen of the most popular technical charting patterns and price action candles that we observe on all timeframes and in all different trading markets.
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