Triangular chart patterns can either be symmetrical, ascending or descending. They are formed by converging support and resistance levels.

Symmetrical Triangles

Symmetrical Triangle Chart

A Symmetrical Triangle is formed by the convergence of a descending resistance line and an ascending support line. It is usually a sign of trend continuation, reflecting a period of price consolidation before the price resumes moving in its prior direction.

As depicted in the chart above, price is seen to move between resistance and support levels. If the Symmetrical Triangle is preceded by a downward trend, the price is likely to break below the ascending support line and move downward. If, however, the pattern succeeds an uptrend, the price is likely to break above the descending resistance line and rise further.

Ascending Triangles

Ascending Triangle Chart

The Ascending Triangle is a bullish pattern formed by a flat resistance line and an ascending support line. Price movement is contained within the resistance and support levels, until it breaks past the resistance line and moves upward.

The Ascending Triangle is usually a trend continuation pattern that is spotted during uptrends, yet its formation during a downtrend is also likely.

Descending Triangles

Descending Triangle Chart

As opposed to the Ascending Triangle, which is a bullish pattern, the Descending Triangle is bearish and usually spotted during downtrends. It is formed by a descending resistance line and a flat support line, with price movement confined within these two levels before usually breaking below the support level to fall further.

As a chart pattern usually formed during downtrends, the Descending Triangle is generally considered to point towards trend continuation, yet it is also likely to be formed during uptrends.

Did you know?

The GBP/USD pair is widely referred to as “cable”. The term dates back to the 19th century, during which the exchange rate between the U.S. dollar and the British Pound was transmitted across the Atlantic via a huge cable that ran across the ocean floor and connected the two countries.

Word of the day
"Rectangle" - A chart formation that indicates trend continuation.
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