Ascending triangles form when price creates a horizontal resistance line at the top and a rising support trendline at the bottom, indicating buyers are becoming more aggressive. Descending triangles feature a horizontal support floor with a declining resistance trendline, suggesting sellers are gaining control. Both patterns are typically continuation patterns that resolve in the direction of the prevailing trend with a measured move target equal to the triangle's height.
Ascending triangles have flat resistance and rising support, reflecting increasing buying pressure. Descending triangles have flat support and declining resistance, reflecting increasing selling pressure. Both require at least two touches on each boundary to be valid patterns. Volume typically contracts during formation and expands on the breakout. The measured move target equals the height of the triangle at its widest point, projected from the breakout. While classified as continuation patterns, both can occasionally act as reversal patterns when formed against the trend.
Enter on a close above the flat resistance of an ascending triangle with volume surge. Enter on a close below the flat support of a descending triangle with volume confirmation. Wait for a retest of the broken boundary for a lower-risk entry. Confirm with momentum indicators aligning with the breakout direction.
Target the measured move — the triangle height projected from the breakout point. Stop just inside the triangle below the last higher low (ascending) or above the last lower high (descending). Exit if the breakout fails and price returns inside the triangle with conviction. Trail stops using the rising support line for ascending triangles or declining resistance for descending.
1H, 4H, Daily
Ascending triangles that form during an uptrend have the highest probability of breaking out to the upside, and descending triangles during a downtrend break down most reliably. Be cautious of false breakouts — require a candle close beyond the boundary rather than just a wick. Volume is the key validator: a breakout without volume expansion often fails.
The inverse cup and handle is a bearish continuation or reversal pattern that mirrors the bullish cup and handle formation. It consists of a rounded top (the inverted cup) followed by a brief upward consolidation (the handle). The pattern indicates that buying attempts fail to sustain higher prices, and the handle's upward drift represents a final weak rally before sellers take control, breaking price below the handle's support.
Rising and falling wedges are converging trendline patterns where both support and resistance slope in the same direction. A rising wedge (both lines slope upward, converging) is typically bearish, while a falling wedge (both lines slope downward, converging) is typically bullish. Wedges differ from triangles because both trendlines slope in the same direction rather than converging symmetrically.
Triple tops and triple bottoms are reversal patterns where price tests the same level three times before reversing. They are essentially double tops and bottoms with an additional test, making them rarer but potentially more significant. The three-touch structure confirms that a price level is acting as a strong barrier, and the eventual break of the pattern's support or resistance level triggers the reversal.
Measured move projections use the length of a prior price swing to forecast the target of the next swing in the same direction. The technique assumes market symmetry — that the second leg of a move will approximate the distance of the first leg. Measured moves apply to impulse waves, corrective patterns, and chart pattern breakouts, providing objective price targets that remove subjectivity from exit planning.