There are many patterns that traders use to make trading decisions. however, In this tutorial I am only going to cover the triangle patterns. Triangle patterns are amongst the most frequently formed patterns and are very easy to trade.
There are three main types of triangle patterns: symmetrical pattern , ascending pattern , and descending pattern.
#1. Symmetrical triangle pattern
Symmetrical pattern is formed by a series of highs that are lower than the preceding high and a series of lows that are higher than the preceding low.
Basically, the slope of the Price’s high and the slop of Price’s low converge together to a point where it looks like a triangle. Hence called triangle pattern. The chart below is an example of a symmetrical pattern.
#2. Ascending triangle pattern
Ascending pattern indicate an upward trend, with a horizontal resistance line and a series of higher lows. Here is how this pattern looks like
Although in most cases the price is expected to break the horizontal resistance line, price can break either way.
Sometimes the price fail to breaking the horizontal resistance line and break the rising line. Therefore, it doesn’t matter which line the price will break, the only thing that matters is the break-out.
#3. Descending triangle pattern
This triangle pattern is the opposite of ascending triangle pattern- It looks like ascending triangle, except that ascending triangle has a horizontal resistance line and a diagonal support line.
Descending pattern is formed by a horizontal support line and a diagonal descending trendline. This is how descending triangle pattern looks like.
On this pattern, the price is expected to break the horizontal support line. However, the price can break either way.
How to draw triangle patterns
In fact, trendlines and support and resistance levels are the core of triangle patterns.
How to trade triangle patterns
After you have drawn your symmetrical pattern,Wait for the market price to break either the falling or rising line.
Note: the price must break and close. If the candlestick that touches the descending line breaks the line, wait for The price to close above the falling line then Place a buy trade.
Stop loss- Place your stop loss few pips below the candlestick that breaks the trend line.
take profit- Use the swing high as your profit target.
If the candlestick breaks the ascending line then wait for the price to close below the falling trendline then place a sell trade
Stop loss – For your stop loss, place it few pips above the candlestick that breaks the rising trendline.
Take profit – use the previous swing low as your profit target. See the example below.
How to trade ascending and descending patterns
Similar to symmetrical pattern, wait to the price to break the pattern before you can place a trade. As soon as you spot these patterns, wait for the breakout to appear.
Note the breakout only become valid when the price break and close above the resistance line, or when it break and close the below the support line.
See the chart below for example.
Here is a cautionary note: Triangle patterns, just like other techniques, are not a completely reliable . They do have false breakouts that’s why it’s very important that you wait for the candlestick to close, even so, the close of the candlestick won’t guarantee you a successful.
There you have it. Triangle patterns!
To master these triangle patterns, join my private room to see how I trade them with other traders.
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