Ascending triangle consists of horizontal resistance and ascending support trendline. This forex pattern signalises decreasing success of bears to push the price down, while the bulls manage to reach previous high with each swing. Ascending triangle signalises that bears are getting exhausted and losing in the struggle to push the price downwards within the trading range.
About ascending triangle forex pattern
Price will move within triangle boundaries until breakout of horizontal resistance (upper triangle border). This fantastic forex pattern found in the uptrend signalises its health and strength and more likely trend continuation. When found in the downtrend, it is not sufficient to confirm its reversal. In downtrend it signalises that upwards correction is not over and market may pause for a while.
For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.
Trading ascending triangle forex pattern
We expect breakout of upper trendline (horizontal resistance). We enter the position on breakout candle close.
Using fakeouts as entry long. We enter on down candle briefly penetrating ascending resistance only to close within triangle. We enter long on candle close placing stop loss just below the low of the candle. At the breakout of upper trendline we place stop loss at break even and then we just watch the position roll.
Descending triangle forex pattern
Descending triangle is opposite of ascending triangle. Descending triangle gives us a clean bearish signal of the price captured within its boundaries of horizontal support and descending resistance. Within the downtrend this pattern signalises its continuation. Found in the uptrend it is a clear sign that correction is not over. It is not recommended to use is at standalone reversal pattern.
About descending triangle forex pattern
Descending triangle signalises struggle between bulls and bears in lower timeframes. This struggle is more and more exhausting for bulls with each upward swing. Each consecutive high is lower than previous high, while bears manage to easily reach previous low at support. This situation will eventually lead to support breakout and likely downtrend continuation.
Trading descending triangle pattern in forex
After we identify descending triangle within the downtrend we wait for support breakout (bottom boundary). We wait for full bodied breakout candle to close, for us to enter the position short.
We can also use fakeouts in the upper boundary of triangle. After brief penetration of resistance, while candle closes within triangle, we enter short, placing stop loss above candle high.
Stop loss can be placed (depending on the volatility) at previous swing high or at the highest high reached at the beginning of triangle forex formation (in volatile market).