Ascending Triangles

The ascending triangle is a powerful ‘buy’ signal continuation chart pattern thatTutorial Magnifying Glass can be found in any market or time frame.

The price bars/candles form a clear resistance level in an existing uptrend, but yet also higher and higher swing lows creating the triangle or wedge formation. The pattern indicates that whilst the number of buyers is more or less constant, there are fewer and fewer sellers as the triangle develops and narrows.

Eventually the lack of sellers and therefore lack of asset availability drives price up, often very sharply and quickly, rather like squeezing a tube of toothpaste!

Look to enter the trade long on the break of the resistance level or possibly after a successful retest of this level once broken.

The projected price target is often calculated as the trade entry price plus the distance in price between the widest point of the triangle up to the resistance level. However, as always price action and the presence of other key support and resistance levels above often serve as better guides as to when to take profits.

Check out the video below for further explanation.

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