Triangles

triangles
Triangle patterns are harder to figure.
The support and resistance lines in triangle pattern either slope in opposite direction, i.e. in symmetrical triangle the support line slopes upwards and resistance lines slopes downwards, or one of these lines remains horizontal and other slopes upwards or downwards.

Both wedges and triangles are formed when you have support and resistance lines and they converge together to form a triangular shape.

Flags and pennants may look alike, but these are very short-term patterns compared to wedges and triangles.

Triangle patterns, sometimes called bilateral patterns, form during a trend and are better understood as consolidation patterns instead of just continuation patterns. The trend should be at least a few month old. Most of the time the direction of the breakout, while likely, is difficult to predict and it is better to be ready for a breakout in either direction.

Symmetrical Triangle
bullbearThe symmetrical triangle has no definitive slope and no bias. The pattern contains at least two lower highs and two higher lows. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape.

As the symmetrical triangle extends and the trading range contracts, volume should start to diminish. This refers to the quiet before the storm, or the tightening consolidation before the breakout.

The symmetrical triangle can extend for a few weeks or many months. If the pattern is less than 3 weeks, it is usually considered a pennant. Typically, the time duration is about 3 months.

The ideal breakout point occurs 1/2 to 3/4 of the way through the pattern’s development or time-span, and should occur with an expansion in volume, especially on upside breakouts. However, the direction of the price action can only be determined after a valid breakout.

Ascending Triangle
bullThe ascending triangle is a formation that usually forms during an uptrend as a continuation pattern and denotes a bullish bias. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation.

The horizontal line represents overhead supply (resistance) that prevents the digital asset from moving past that level. It could be that a large sell order has been placed at this level and it is taking a good time period to execute, thus preventing the price from rising further. The lows continue to rise, which indicates increased buying pressure and that gives the ascending triangle its bullish bias.

The length of the pattern can range from a few weeks to many months with the average pattern lasting from 1-3 months. However, the length and duration of the current trend is not as important as the robustness of the formation.

As the pattern develops, volume usually contracts. An expansion of volume during the breakout acts as confirmation. While volume confirmation is preferred, it is not always necessary.

Descending Triangle
bearThe descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns. Regardless of where they form, descending triangles are bearish patterns that indicate distribution.

The horizontal line represents demand (support) that prevents the digital asset from declining past that level. It could be that a large buy order has been placed at this level and it is taking a good time period to execute, thus preventing the price from declining further. The highs continue to decline, which indicates increased selling pressure and that gives the descending triangle its bearish bias.

The length of the pattern can range from a few weeks to many months with the average pattern lasting from 1-3 months. However, the length and duration of the current trend is not as important as the robustness of the formation.

As the pattern develops, volume usually contracts. An expansion of volume during the breakdown acts as confirmation. While volume confirmation is preferred, it is not always necessary.