The Ascending Triangle Pattern Explained

For those who are new here, the Ascending Triangle Pattern is a bullish formation that usually forms during an uptrend. It is a continuation pattern that indicates accumulation. Sometimes ascending triangles can form as reversal patterns towards the end of a downtrend, however this is uncommon.

The appearance of the ascending triangle pattern closely resembles that of a right-angle triangle shape, in geometry terms! Let us dive deeper and understand the nature of this pattern, its formation process, and practical applications, at play.

What Is the Ascending Triangle Pattern?

Simply put the Ascending Triangle is similar to a box where the price has been in consolidation trying to break free and head toward an uptrend. As previously stated it signifies a pattern of continuation.

This just means that the price will keep moving in the same trend as it was before consolidation. This chart pattern is used to do technical analysis. If this pattern is formed at the end of a downtrend then it may mean a bullish reversal.

How is it Formed and What Does it Tell Us?

This pattern is formed with two lines. The first line denotes the resistance level from where the price keeps rebounding. The second line is formed when higher lows in the price movement are joined together. This is what makes it an ascending line that slopes upward. This entire formation resembles the shape of a triangle.

As we mentioned above, this chart is used in technical analysis. The price movement has been an uptrend after which it starts to consolidate. There are multiple times when the price reaches a resistance level. But, the thing is when the price is rebounded after testing the resistance, it makes for higher lows.

What does this show us? It shows us that there are multiple buyers who are fighting to go over this resistance level. This makes a bullish build-up that results in a breakout at the resistance level.

Features of Ascending Triangle Pattern

The major features of this pattern are as follows:

Strong Trend – A strong is when the price actions start off from an uptrend. This is what an ascending triangle pattern needs to exist in the first place.
Temporary Pause – Temporary pause refers to the time when the price is in its consolidation phase. This phase is helpful for the buyers.
Breakout – when the price goes above the resistance level, it marks a breakout that activates the pattern. This pattern will help us evaluate the entry, stop loss, and profit-taking points in the future.

Pros and Cons of the Ascending Triangle Pattern Chart

There are quite a few pros and cons to discuss about this pattern chart. Have a look at them below:

Advantages	Ascending Triangle Pattern helps to define the trading environment. With the help of this chart, the uptrend extends. Traders get a lot of help if this pattern is activated because then they choose whether to take profit or exercise stop loss. These triangles are easy to recognize because they are in a continuation pattern.
Disadvantages	There are chances the price action could move above the resistance line just to move below the next second. The Ascending triangle pattern rarely appears in perfect formation. The strength and power cannot be controlled which is why the price could move in the opposite direction.

Wrapping Up

This was my take on the ascending triangle pattern. It is a part of the triangle pattern group and is in a continuation pattern. You will find that it appears during a bullish uptrend. This gives the traders an opportunity to find entry levels during a trend that is ongoing.

However, take care of false breakout patterns that have longer than necessary consolidation duration. If you have any questions, please feel free to leave them in the comment box below!

Khushi Singla

As a writer, my task is not only writing but making tough topics easy to understand. I have the ability to connect with the readers and deliver them the best piece of writing.