Ascending Triangle Trading Pattern
Real-life Ascending Triangle Examples
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Ascending Triangle Trade Setup:
This is a bullish continuation or breakout pattern that often appears during an uptrend. It indicates potential continuation in the prevailing bullish direction after a period of consolidation.
Entry & Exit:
Predictability & Factors to Consider:
Suppose a stock in an uptrend has been trading between $100 and $110 for several weeks. The price has tested the $110 resistance level multiple times, forming the horizontal line of the triangle, but has made progressively higher lows at $101, $103, and $105, forming the ascending trendline. If the stock breaks above the $110 resistance level with strong volume, a trader might expect a bullish continuation. Given the triangle's vertical height of $10 ($110-$100), the trader might set a target price of $120 ($110 + $10).
WARNING: As with any technical pattern, it's imperative to approach the ascending triangle with caution. Although it has shown predictability in certain scenarios, no pattern is foolproof. External factors and unexpected news can disrupt the anticipated trajectory of the stock's price. Always use multiple indicators and comprehensive research to make well-informed trading decisions. This is for educational purposes only. Always seek out a registered investment advisor before trading.