Triangles Pattern
Symmetrical Triangles
Symmetrical Triangles is usually a result of a lack of conviction regarding which way the price will move. A technical trader will search for this pattern and look for two converging trend lines that meet at a point called the apex. The converging trend lines will give a triangular shape, that is why it is called Symmetrical triangles. These trend lines act as a barrier that prevent the price from moving up or down dramatically. But once the price does breaks these barrier, volatility increases and the price can experience a sharp movement in the direction of the breakout. Traders will need to identify the breakout to gain from the sharp price movement.
Ascending or Descending Triangle
Ascending or Descending Triangle is similar to Symmetrical Triangles. Ascending Triangle is a bullish pattern, while the Descending is a bearish pattern.
In Ascending Triangle, the first trend line is drawn horizontally at a resistance level that prevented the price from moving higher. The second trend line is drawn upward. When the resistance level is broken, the price will move up aggressively.
In Descending Triangle, the first trend line is drawn horizontally at a support level that prevented the price from moving lower. The second trend line is drawn downward. When the support level is broken, the price will move down aggressively.
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