Ascending Triangle has an upward pattern that will indicate the price of securities is likely to rise. This pattern will form when the price bounces between two lines. For more details about the Ascending Triangle itself, make sure you read the article below. Also, register yourself at GIC and immediately get profit by trading with us!

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Understanding Ascending Triangle Pattern

The ascending triangle pattern is bullish, meaning it indicates that the price of the security is likely to move higher when the pattern completes itself. The pattern is created with two trendlines.

The first trendline is flat along the top of the triangle and acts as a resistance point that once price breaks above it signals the resumption or beginning of an uptrend.
 
The second trendline—the bottom line of the pattern that shows price support—is an ascending line formed by a series of higher lows. This configuration is formed by higher lows that form the triangle and gives it a bullish character.
 
The basic interpretation is that the pattern reveals that each time sellers attempt to push prices lower, they are less and less successful. An ascending triangle pattern forms when the price of a security bounces back and forth between the two lines. Price moves to a higher high, which inevitably encounters resistance leading to a price decline as the security is sold.
 
Although price may fail to overcome resistance several times, this does not lead to increased strength for sellers, as evidenced by the fact that each sell-off after meeting resistance stalls at a higher level than the previous sell-off attempt.

Finally, price breaks through the upside resistance and continues in an uptrend. In most cases, price is already in an overall uptrend and this pattern is seen as a consolidation and continuation pattern. If this pattern forms during an overall downtrend in the market, it is usually seen as an indication of a possible upcoming market reversal to the upside.
 
An ascending triangle is a bullish continuation chart pattern. It is formed by two converging lines. The first straight line is the bullish oblique support, also known as the "ascending triangle support line". The second line is the horizontal resistance, also known as the "ascending triangle resistance line". An ascending triangle is confirmed/valid if it has good oscillation between the two lines.
 
Each of these lines must be touched at least twice to validate the pattern. NB: a line is considered "valid" if the price line touches the support or resistance line at least 3 times. This means that the ascending triangle pattern is considered valid if the price touches the support line at least 3 times and the resistance line twice (or the support line at least twice and the resistance line at least 3 times).

The price target of this pattern is determined by the high point of the triangle base, which is plotted at the breakout point (above the resistance). Another technique consists of drawing a line parallel to the support line of this pattern, from the first contact with the resistance.
 

Characteristics of the Ascending Triangle Pattern

In general, these patterns are bullish formations that occur during an uptrend and help traders find upside breakouts. However, it is important to remember that these charting patterns are rarely recognized perfectly and systematically (such as double bottom and triple bottom patterns for example).
 
Therefore, it takes a certain level of experience and judgment to identify the patterns, especially the upper flat line that acts as an important resistance line.
 
However, you don't need to be a rocket scientist to find the patterns. Basically, all you need to do is find price consolidation during an ongoing trend. Second, try to identify an upper resistance line with at least two higher highs that will help you determine the upper line. Finally, draw an uptrend line with at least two higher lows.

Examples are a great way to understand what a pattern looks like on a price chart. In the example below, you can see how an ascending triangle pattern formed on the USD/JPY 1H chart. Two highs on the upper trendline, three lows on the lower trendline rising, and a clear price crossover that was eventually broken. As a result, the pattern was confirmed and the bullish trend continued.


Ascending Triangle: Ciri, Cara, Contoh, Jenis dari Ascending Triangle

Considering all the above information, here are the steps you need to follow to identify and use the ascending triangle pattern:
  1. Identify price consolidation during an uptrend
  2. Draw a horizontal line above with at least two failed attempts to break the resistance level.
  3. Identify an uptrend line with at least two rising lows.
  4. Wait for the breakout to occur and place a buy order when the first candle after the breakout closes above the upper line (to confirm the breakout).
  5. Set a stop-loss order below the upper horizontal line.
Bullish Pattern – This pattern is considered bullish, meaning traders will look to initiate long positions once it breaks through the upper resistance level.

Continuation Pattern – This pattern is generally a continuation pattern, meaning that its predictive properties are most effective when a stock continues an uptrend.

Timeframen – This pattern can be used on several timeframes. They may be on intraday charts, hourly charts, daily charts, and weekly charts.

Ascending Triangle: Ciri, Cara, Contoh, Jenis dari Ascending Triangle

Example of an Ascending Triangle Pattern

Ascending Triangle: Ciri, Cara, Contoh, Jenis dari Ascending Triangle
 

Here is an example of the ascending triangle pattern itself ASCENDING TRIANGLE IN AN UPTREND (BULLISH) Ascending triangle in an uptrend. Volume drops during formation, increases and then expands during the breakout and subsequent up move.

 
Ascending Triangle: Ciri, Cara, Contoh, Jenis dari Ascending Triangle

ASCENDING TRIANGLE IN UPTREND (BULLISH) ascending triangle in an uptrend. After almost two months of indecision, the market is aggressively resolving itself in the direction of the trend. As for volume, aside from a few spikes in activity within the pattern, there is a general decline in participation with a marked increase on the breakout.
 

How to Read Ascending Triangle Pattern

With this pattern, the wider the pattern, the more risk/reward it carries. For narrower patterns, the stop loss becomes smaller; however, the profit target is still based on the most significant part of the pattern. In terms of challenges for traders looking to use this chart, false breakouts are an important consideration.

Price action may fluctuate, moving in and out of the pattern in both directions failing to break through the upper resistance level.
  • The most frequent exits occur at 2/3 of the triangle length. This level of exit offers the best performance.
  • The price target of this pattern is generally obtained before the tip of the triangle (the intersection of the two lines that form the triangle).
  • False breaks do not provide any indication of the true exit direction.
  • Avoid taking positions if the break/exit occurs before 2/3 of the triangle's length.
  • The pullback of support at the resistance line of this pattern hurts performance.

Ascending Triangle Types

The following are types of ascending triangle patterns.
 

Ascending Triangle Bullish

The ascending triangle pattern is bullish, meaning that it indicates that the price of the security is likely to move higher when the pattern completes itself. The pattern is created with two trendlines.
The first trendline is flat along the top of the triangle and acts as a resistance point that once price breaks above it signals the resumption or beginning of an uptrend.
 
The second trendline at the bottom of the triangle that shows price support is a rising line formed by a series of higher lows. This configuration is formed by higher lows that form the triangle and gives it a bullish characterization.
The basic interpretation is that the pattern reveals that each time sellers attempt to push prices lower, they are less and less successful. An ascending triangle pattern forms when the price of a security bounces back and forth between two lines.
 
Price moves to a higher high, which inevitably encounters resistance, leading to a price decline as the security is sold. Although price may fail to overcome resistance several times, this does not lead to increased strength for sellers, as evidenced by the fact that each sell-off after meeting resistance stalls at a higher level than the previous sell-off attempt.
 
Eventually, price breaks through the upside resistance and continues in an uptrend. In many cases, price is already in an overall uptrend, and this pattern is viewed as a consolidation and continuation pattern. If an ascending triangle pattern forms during an overall downtrend in the market, it is usually seen as an indication of a possible upcoming market reversal to the upside.

Ascending Triangle: Ciri, Cara, Contoh, Jenis dari Ascending Triangle

Ascending Triangle Bearish

Based on its name, it should come as no surprise that the descending triangle pattern is the opposite of the pattern we just discussed. This triangle pattern offers traders a bearish signal, indicating that prices will continue to fall as the pattern resolves itself. Again, two trendlines form the pattern, but in this case, the lower support line is flat, while the upper resistance line slopes downward.
 
Just as the ascending triangle is often a continuation pattern that forms in an overall uptrend, the descending triangle is a common continuation pattern that forms in a downtrend. When it appears during a long-term uptrend, it is usually considered a signal of a possible market reversal and change in trend. This pattern develops when the price of a security falls but then bounces off the support line and rises.
 
However, each attempt to push the price higher is less successful than the previous one, and eventually, sellers take control of the market and push the price below the lower support line of the triangle. This action confirms the descending triangle pattern’s indication that prices are headed lower. Traders can short on the downside breakout.
 

Trading Benefits Using Ascending Triangle Pattern

The ascending triangle is a trader-friendly pattern. It helps traders understand the trend if there is going to be a reversal or continuation of the trend. But everything comes with its limitations, and the ascending triangle is no exception to that fact. The advantages are:
  • This pattern is easier to recognize. Even beginners can trace this pattern with a little knowledge.
  • This pattern can confirm the continuation or reversal of an uptrend, attracting more buyers.
  • Its built-in measurement techniques are easy to use and help traders identify potential profits.
After knowing the ascending triangle, then you can determine what actions can be taken on the pattern. In addition, be sure to read other articles such as Characteristics and How to Trade Using Spinning Tops Candles.