Triangle
Lesson 6B: Breakout Patterns - Ascending Triangle (Bullish)Hello Friends,
Welcome to the series of Lesson 6. In Lesson 6B, we are going to learn the Ascending Triangle breakout pattern. This is more of a continuation pattern rather than the reversal pattern as oppose to the Falling Wedge pattern that we learned in Lesson 6A.
Lets get straight into the topic. Please be very careful.
We will be referring to the chart above or below to get a better understanding of the topic:
What is Ascending Triangle Pattern?
Ascending Triangle is a bullish continuation pattern, which we quite often see in the crypto world. When a coin is inside the Ascending Triangle, it means it is currently being accumulated, before it breaks out.
Formation:
Lets go back to some Mathematics. We all studied what is a Right Angle Triangle correct? If we look closely at the chart above, we see that it is forming a right angle triangle.
There are two lines to this formation, one is the resistance line, which is horizontal as you can clearly see. The second is the support line which is ascending as you see and it moves up with the price (basically it is inclined moving up as we go from left to right).
The horizontal (resistance) line is formed by 2 or more equal reaction highs touching the horizontal.
The ascending (support) line is formed by 2 or more higher lows touching the ascending support line.
The Rules:
So obviously, you won't just draw an ascending triangle, and think that this is a bullish pattern. There are a few things you need to confirm before making an entry into the coin. Lets look into it.
You must be wondering, how many times the price candle has to touch the resistance line or the support line to consider this pattern valid? Here is the answer:
For the Horizontal (Resistance Line), the price candle has to touch at least TWO or more times to consider a part of this pattern valid. Notice in the chart how the price pull after touching the resistance line FOUR times.
For the Ascending (Support Line), the price candle also has to touch at least TWO or more times to consider this pattern valid. Notice how in the chart the price candle bounces after touching the support line THREE times.
Note (IMPORTANT) :
For the Resistance Line, it is preferred that the candles touching it are equal or doesn't differ in height by too much difference. Usually I only consider the patterns for which the reactions highs are equal for this pattern.
For the Support Line, it is preferred that we have reaction lows as Higher Lows. If we see a reaction low lower than or equal to the previous reaction low, this pattern will be INVALID.
Also note from the chart that there has to be a little distance between the reaction highs, or reaction lows, as you can see in the chart. Just a little is fine.
Since crypto is very volatile, the length of time this pattern occurs doesn't really matter much, but the longer the length the stronger the patter. It's that simple. I stick to 30m or more for this pattern.
I am sure you guys are understanding this really well, as this pattern is very simple to understand or do I make it simple to understand? :P
Lets take a look at the breakout setup.
Continue reading below.....
ETHUSD - Descending Triangle + Bear FlagHi All,
This is just a initial stage of the pattern, the pattern usually change to ascending/descending triangle and sometime to raising/ falling wedge or a channel. Just monitor on the declining of the volume until the breakout volume spike. (to identify the target price).
1. Descending Triangle - This pattern is usually a continuation pattern, but some cases, there is a breakout at the triangle resistant line.
2. Bear Flag.
3. Stoch RSI just returned from overbought
once bear flag pattern is confirmed, it will affect the MACD and form a bearish divergent. (and confirm the descending triangle bearish pattern).
This TA is for Educational purpose and not a financial advice. If you are happy with my charts and would like to follow more in the future, feel free to follow my profiles.
BTCUSD - Symmetrical Triangle BreakoutDear All,
If you follow my previous TA, this is the part of it and a details analysis on the breakout of the Symmetrical Triangle. Since this is Educational TA, let me explain in details;
What is Symmetrical Triangle?
1. Symmetrical Triangle is a continuation Pattern. So you need to look where is the entry. For this case, the entry is from bearish trend. Once the breakout is confirmed, it will continue goes downwards.
2. Volume for Symmetrical is similar with other pattern, where the volume reduced until it reach breaking point. For this case, the selling volume will at high for the continuation to bearish side.
Few info I used in this charts;
1. MACD - This indicator to check on the market momentum, as you can see at the breakout, the 12 EMA is going to cross 26 EMA again and goes downwards to denied bull trend.
2. Stoch RSI – This is one of my favourite indicators after Volume and MACD, it show the market is just returned from overbought market. We are heading to oversold area again for a new correction.
3. I drew a 300 days SMA line from day chart as a big support at the range of $7282.5-7343.9.
4. Previous Support line also identified since we are expecting a bounce anytime from this pattern. The support at $7671.2 and $7430.3 is identified.
5. $7102.2 is the lowest target where that is a technical target based on Symmetrical Triangle pattern. Take note that the target is not 100% achievable and that is the reason why previous support/resistant and also SMA need to identified.
This TA is for Educational purpose and not a financial advice. If you are happy with my charts and would like to follow more in the future, feel free to follow my profiles.
BTCUSD - Symmetrical TriangleHi All,
Previous Bear Flag and Raising Wedge Target is complete and lets see latest pattern.
Since Daily Stoch still bearish, we probably will go another bear pattern. Symmetrical Triangle. Symmetrical is a Continuation Pattern. Since the Entry is from bearish trend, it will continue going downwards. MACD and stoch RSI in 2 hours look bull, but probably denied due to bear trend in day chart. Just monitor on the breakout and spike in volume.
*This TA is for Educational purpose and not a financial advise. If you are happy with my charts and would like to follow more in the future, feel free to follow my profiles.
So You Think that Patterns are Useless? Reevaluate it.Hey, I am back with another, this time educational analysis.
In this educational analysis you can see some obvious patterns in the chart, that helps you decide when to buy or sell.
Simple usage of just three indicators, Volume , RSI , and MACD .
At first I though, sure, how can some pattern show me the price movement.. But I was wrong.
Ok, so in the time of 9 hours, we can see two Pennants , one Ascending Triangle , Head and Shoulders and Small Flag. If u were this time, during the breakout looking at the graph, and you were able to spot all these Patterns you could earn 62,5% in 9 hours!
For Example, The top of head and shoulders, the top was when it did triple top on RSI and MACD showed trend reversal.
Unfortunately, in the 15 min chart, it looks kinda Meh, so please, take a look lower, where is the 1 min chart, that is a lot more clearer.
Tradingview doesnt allow to post less than 15 min charts.
Thanks!
Exactly how I decided to bail before the fall.To clarify an earlier post, I thought I would explain the signs that told me to sell my coins just before the beginning of the recent fall, in the hopes that it might help someone at some point in the future if they see something similar. It also helps me to write my thoughts down.
A dramatic price rise can be seen on the chart as the popularity of cryptocurrencies caught the imagination of the masses. Since supply is relatively limited (new coins only appear through mining and the release of brand new types of coin), then as demand shot up, so did the price. It reached a point of correction (a peak), from where it fell hard until it found/formed a level of support. It bounced up from that, but fell down again, temporarily breaking its support (a spring before an upthrust). The rise of the upthrust found, and established, a level of resistance, then fell back down to the same, previous, level of support. At this point a triangular consolidation is becoming apparent, one with fast falling highs and angles pointing downward.
Then the price bounces off the support of the bottom triangle again, but this time it is different because two things have just happened: The MACD has made it clear that the sellers are NOT exhausted, but that the buyers ARE exhausted. So, this rise is likely to fail because of the weak bulls, then fall hard because of the strong bears (becoming a powerful test of the support).
The consolidation pattern was going to breakout at some point, because as the amplitude of the price range narrows (the highs and lows get closer as we move toward the point of the triangle) pressure builds in the volatility-loving World of cryptocurrency. The signs were that a breakout would be downwards, and made a more likely occurrence by the evidence of the strong bears and weak bulls in the preceding MACD cycle. Though it could have carried trading on within the triangle, or even had a breakout upwards. That time of the bulls buying seemed like a good time to sell and get out.
The fall that followed began a series of consolidation triangles, each pushing the price down further; I am not a fan of shorting, so the rises within these triangles were good to ride (charts can be seen in some of my other posts).
I hope someone finds this useful. Thanks for reading.
Best wishes and good luck to you all.
Example of a Symmetrical Triangle on VNQVNQ formed a symmetrical triangle. It has two trend lines. One uptrend line is acting as support while the downtrend line is acting as resistance.
This triangle contains three highs lower and three lows higher. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape.
The symmetrical triangle can be continuation or reversal, so we must wait for which line will break. To confirm the breakout, the price should close above the resistance line or below the support line. In this case broke by support, then we must make a short.
The profit target is the distance away as the back of the triangle.
Example of a Symmetrical Triangle on ETHUSDETHUSD formed a symmetrical triangle. It has two trend lines. One uptrend line is acting as support while the downtrend line is acting as resistance.
Contains three highs lower and two lows higher. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape.
The symmetrical triangle can be continuation or reversal, so we must wait for which line will break. To confirm the breakout, the price should close above the resistance line or below the support line. In this case broke by resistance, then we must make a long.
The profit target is the distance away as the back of the triangle.
Example of an Ascending TriangleGBPAUD formed an ascending triangle. We could see a horizontal upper line (that would be a resistance) and a lower uptrend line (that would be a support).
Prices moves with equal highs, and lows higher than previous.
Then after a few attempts, the prices finally break through resistance.
The ascending triangle is a continuation pattern. Prices come from an uptrend then prices bounce inside the triangle before breaking higher.
To confirm the breakout, the price should close above the resistance line, if so, make a long. The profit target is the distance away as the back of the triangle.
Just wanted to share my triangle scalping theory for crude oilThis pattern has brought me great success scalping crude oil.
How to trade it:
Look for an ABCD triangle formation with lower highs and higher lows.
Draw the triangle with extended lines.
Measure the baseline at B and divide it by 2
Add this value to the point of breakout to get a nice padded target to either side
Look out for fakeouts and good luck.
Backtests may occur on the extended lines to the right but moving between them invalidates the triangle and the trade should be closed.
Simple Patterns Tutorial Part 1. Ascending TrianglesHey Traders, I am going to do a short free tutorial on Simple Patterns. This tutorial's purpose is to show you:
-How to Identify Ascending Triangles
-How to measure the move to project price targets
-Examples of how you can create a rules based Strategy around Simple Patterns.
- Psychology behind Ascending Triangles
The Ascending Triangle is a Bullish Pattern and should be traded with the trend! There are a couple things that you should consider if you decide to create a strategy based around these Patterns:
1) I have found that these Patterns are not very successful if you are using them for countertrend trades. I'm sure someone out there has a strategy that consists of these patterns to signal a counter trend trade however it personally did not work for me. I found that these Patterns are extremely accurate when you are trading with the trend and couple them with a pullback or specific candle formation after the breakout has occurred.
2) Volume should increase when price breaks out of the Ascending Triangle formation
3) These Patterns will not always be picture perfect therefore we need to look for the characteristics of the Pattern as opposed to perfect lines. The characteristics being, relatively equal highs creating a near horizontal Resistance line, and higher lows creating a rising (Ascending) Support line.
4) These Patterns tend to complete within 3/4 of the way to the APEX. I have found that these Pattern tend to be invalidated if price trades to far into the APEX.
Psychology behind an Ascending Triangle:
The top line of the Ascending Triangle (Resistance) is a price level where the sellers are able to overcome the buyers and push price down. As this pattern continues to form, you will notice that the sellers are unable to push price as low this time and this is where the Ascending Trend line begins to form. As this pattern continues, again the sellers are unable to push price as low as the most previous low and the buyers are beginning to overpower the sellers. The Psychology aspect is that every time the sellers push price down, the buyers are willing to pay a higher price for there shares (this creates the Ascending Triangle). Eventually, the buyers will pay a high enough price to overcome the sellers and break through the upper Ascending Triangle line (Resistance).
I hope this was helpful! I cannot possibly cover every aspect of every pattern so please feel free to message me or comment below with any questions you may have! I will be happy to help! Thanks Traders, make sure you do your due diligence and back test any strategy or pattern that you are attempting to create. You will also need conditions, criteria, and rules for that strategy. This will save you a lot of money and give you confidence in your trades. I have attached a live example of an Ascending Triangle below and I will periodically be posting more examples like that one as an update to this tutorial.
Educational post - Difference between a wedge and a triangle Hey guys this is a very short educational post on two of the most commonly found chart patterns in the market. These are often mistaken and confused even by experienced traders. Here we have a rising wedge and a bearish triangle both are bearish in nature. However one is a reversal pattern and the other is a trend continuation pattern
Example of a wedge
Example of a bearish trianlge
I hope you guys found this beneficial. Next time we shall talk about bullish variations of these two patterns with examples.
Cheers
Educational Post (Different Chart Patterns)Hope this will help you! Give thumbs up & comment if you like it!
How triangle works on bullish channel?Dear friend's
How triangle works on bullish channel?
This is a simple way to find entry point in triangle bullish movement.
inverse, in bearish movement is true.
Hope this lesson help to me and help to you for improve your trading.
Kind regards,
Pooya Salehipour
