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Triangles are continuation patterns that typically indicate a pause in the current trend before it resumes.
Symmetrical Triangle: Formed by converging trendlines, where the slopes of the highs and lows converge towards each other. It signals that the price could break out in either direction, typically following the prior trend.
Ascending Triangle: Characterized by a horizontal upper trendline and a rising lower trendline. It indicates a bullish continuation pattern, with a breakout expected to the upside.
Descending Triangle: Defined by a horizontal lower trendline and a descending upper trendline. It signifies a bearish continuation pattern, with a breakout expected to the downside.
Rules of Triangles
1. At least two points are needed to draw each trendline.
2. The pattern should ideally be completed within 3/4th.
3. The volume should decrease as the pattern progresses and then increase on the breakout.