Mastering the 3 Triangle Pattern: Tips and Tricks for Successful Trading
The Triangle Pattern is one of the best price action trading strategies which is used by many traders and it works in all timeframes. This triangle pattern will give you a clear signal when compared with the other chart patterns and also it is very easy to draw the triangle pattern. So how to find a triangle pattern and how to trade using that pattern? Let’s see them now.
Table of Contents
How do triangle patterns form?
First, we see how the triangle pattern forms, considering there is competition between buyers and sellers. The buyers push the price up and at one particular point, the sellers drag the price down. They do it continuously before the price reaches the previous support and resistance level. And so the price starts to form a narrow range.
After forming a narrow range, at a particular point, it needs to move any one side either up or down. If it breaks upside the buyers win and the stock price may move in upward direction or if it breaks downside the sellers win and the stock price may move in downward direction.
Three types of triangle patterns
We can divide this triangle pattern into three types. They are,
- Ascending Triangle Pattern
- Descending Triangle Pattern
- Symmetrical Triangle Pattern
1. Ascending Triangle Pattern
Ascending triangle is always considered as a bullish signal pattern. When the support line moves in an upward direction and the resistance line maintains the same level, the ascending triangle pattern forms.
Whether it forms in a bull or bear market, if it breaks upside, the stock price may start to move in upward direction.
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Ascending-Triangle-Pattern-Example.webp)
2. Descending Triangle Pattern
Descending triangle is always considered as a bearish signal pattern. It is straight opposite to the ascending triangle pattern. When the resistance line moves in downward direction and the support line maintains the same level, the descending triangle pattern forms.
Also Read: Best 3 ways to identify a market trend with a moving average
Whether it forms in a bull or bear market, if it breaks down, the stock price may start to move in a downward direction.
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Descending-Triangle-Pattern-Example.webp)
3. Symmetrical Triangle Pattern
When the resistance line or upper trendline moves in downward direction and the support line or lower trendline moves in upward direction, the price forms a narrow range and it leads to formation of a symmetrical triangle pattern. It is usually considered as a consolidated phase. Based on the side of the breakout the price may start to move.
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Symmetrical-Triangle-Pattern-Example.webp)
How to trade triangle pattern
If you learn and practice how to draw the triangle pattern, then it is easy to find the entry and exit point.
First let’s quickly see how to draw a triangle pattern. It is very simple, connect all the swing low levels, it forms a lower trendline and also connect all swing high levels, it forms an upper trendline. In one place these two trend lines join together and form the triangle pattern.
After drawing the triangle pattern, check whether the candle breaks up or down trendline. The candle which breaks the triangle line is the signal candle. If the signal candle forms in an upward direction, you need to buy when the next candle breaks the high of the signal candle.
Likewise, if the signal candle forms in a downward direction, you need to enter when the next candle breaks the lower of the signal candle. You might ask why we need to enter after the signal candle is formed. Because the breakout candle tells us whether it is a good breakout or not. Let’s assume you enter before the breakout candle closes, after your entry, the breakout candle forms a large wick and closes within the trendline, what will happen? It is the false breakout. Isn’t it?
So, you need to confirm whether it is a good breakout or false breakout. Don’t enter into a false breakout and lose your money.
Let’s see where to put stop loss and target. You could put stop loss below or above the trendline based upon your entry side. You could book profit based on your risk appetite. You could use 1:2, 1:3 or 1:4 risk reward ratio or you could stay in the trade using trailing stop loss until it shows reversal.
Examples
Let’s see some examples on the chart. Please go through these examples of triangle patterns and after that open your charts and try to find and draw these types of patterns. Do many back tests as much as possible before taking trading.
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Ascending-Triangle-Pattern.webp)
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Descending-Triangle-Pattern.webp)
![](http://senthilstocktrader.com/wp-content/uploads/2023/03/Symmetrical-Triangle-Pattern.webp)
I hope now you get idea about how to draw triangle patterns and take trade using these patterns. Don’t forget to follow the trend. Always follow trends and take trade along with trends. It will increase the winning probabilities. If you have any questions please ask them in the comment. Thank you!