What Does the Ascending Triangle Tell You?Īn ascending triangle is generally considered to be a continuation pattern, meaning that the pattern is significant if it occurs within an uptrend or downtrend. A profit target is calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point. To avoid potential false breakouts, it’s advisable to wait for a price pullback after the falling wedge breakout.

Traders can enter a long or short position depending on the direction of the breakout, placing a stop-loss order below the retested trend line. This technique is quite flexible, as it can be traded on all charts, from the 1-min to the weekly chart. Breakout and Retest: This strategy involves waiting for the price to break out of the wedge and then retest the broken trend line as a new support or resistance level. This method is used by scalper traders, swing traders, day traders and also by position traders. Support and resistance are a key part of trading falling wedge patterns. Use a candlestick close below the base of the wedge as your stop. Once the price breaks out of the base of the wedge, take long entry. Connect the peaks and valleys via trend lines. Breakout trading can be implemented in almost all trading styles. Watch for a falling wedge pattern to form by connecting 2-3 peaks and valleys. A stop loss is typically placed just outside the pattern on the opposite side from the breakout. SELL, if the breakout occurs below a support level.A short trade is taken if the price breaks below the lower trendline.A long trade is taken if the price breaks above the top of the pattern.A breakout in any direction is noteworthy. Ascending triangles are considered a continuation pattern, as the price will typically break out of the triangle in the price direction prevailing before the triangle, although this won't always occur.The trendlines of a triangle need to run along at least two swing highs and two swing lows.

False breakout for falling wedge