TradingNinvestment
Trading and investment website

Ascending Triangle Trading Pattern

4

Ascending Triangle is a continuation pattern that formed with one upward line and one parallel line. This is a bullish triangle  pattern. Formation of this pattern depends on four factors:

(click to enlarge)

Ascending triangle Pattern

1.Trendline: This is a bullish continuation pattern. A established trend line is important for this pattern to be good formation.
2. Duration : this pattern take some time to form. Usually it take 1 to 3 month for formation.
3.Triangle formation: upward trend line and parallel trend line each must have at least 2 points to for triangle formation.
4. Volume: On the break out day big volume is very important. Higher the volume is better. Usually volume is dry up during the triangle formation and pick up after the breakout of the pattern.

Profit Target:

This pattern profit target is max distance between point A and B. In the above graph, Target is Point G from F which is equivalent to max distance between A&B.

(click to enlarge)

Ascending triangle Pattern

 

Ascending TriangleTrade setup:

Here we used the Goldman sach (GS) charts for ascending triangle:

Entry to the Triangle Pattern Trade

This pattern entry occurred after stock broke the upper trend line with big volume. Higher the volume with very strong Green Candle at trend line break, better the performance of the triangle pattern. In the chart, Entry is above the high of breakout bar at 158.75. First price target is G.

(click to enlarge)

Bullish Ascending Triangle -Trade Setup

EXIT 1 For Triangle Pattern:

If stock failed to move up after the break out and came back to the upper trend line and also closes below the upper trend line of the pattern that is a warning sign for the trade. Trader should think about the exit. The first exit should be below the breakout bar at price 155.17 . If price break this point, that means breakout is not valid or stock needs more time for this breakout. Conservative trader can leave the trade after stock went down below the breakout green candlestick. Again if stock hits the upper trend line of the pattern but it’s not close below the trend line, this indicate stock is really strong and no reason to leave the trade

Exit 2 for Triangle Pattern

If stock breached the upper trend line but its not broke the lower trend line or still holding above the lower trend line, trader can still hold his position. However, if stock broke the lower trend line and closed below the trend line, trader should definitely leave the trade. This indicate continuation pattern is completely broken and stock may move down further as a reversal pattern. Exit point should be at price 152.15.

  • Pingback: traderoption.org()

  • It’s awesome to go to see this web site and reading the views of all mates concerning this
    paragraph, while I am also keen of getting familiarity.

  • Im obliged for the blog article.Thanks Again. Great.

  • Your method of explaining everything in this paragraph is truly pleasant, every one be
    able to easily understand it, Thanks a lot.