what does the ascending triangle tell you 
an ascending triangle is generally considered to be a continuation pattern meaning that the pattern is significant if it occurs within an uptrend or downtrend 1 once the breakout from the triangle occurs traders tend to aggressively buy or sell the asset depending on which direction the price broke out image by julie bang investopedia 2019increasing volume helps to confirm the breakout as it shows rising interest as the price moves out of the pattern a minimum of two swing highs and two swing lows are required to form the ascending triangle s trendlines but a greater number of trendline touches tends to produce more reliable trading results since the trendlines are converging on one another if the price continues to move within a triangle for multiple swings the price action becomes more coiled likely leading to a stronger eventual breakout volume tends to be stronger during trending periods than during consolidation periods a triangle is a type of consolidation and therefore volume tends to contract during an ascending triangle as mentioned traders look for volume to increase on a breakout as this helps confirm the price is likely to keep heading in the breakout direction if the price breaks out on low volume that is a warning sign that the breakout lacks strength this could mean the price will move back into the pattern this is called a false breakout for trading purposes an entry is typically taken when the price breaks out buy if the breakout occurs to the upside or short sell if a breakout occurs to the downside a stop loss is placed just outside the opposite side of the pattern for example if a long trade is taken on an upside breakout a stop loss is placed just below the lower trendline a profit target can be estimated based on the height of the triangle added or subtracted from the breakout price the thickest part of the triangle is used if the triangle is 5 high add 5 to the upside breakout point to get the price target if the price breaks lower the profit target is the breakout point less 5 example of how to interpret the ascending triangleinvestopedia sabrina jianghere an ascending triangle forms during a downtrend and the price continues lower following the breakout once the breakout occurred the profit target was attained the short entry or sell signal occurred when the price broke below the lower trendline a stop loss could be placed just above the upper trendline wide patterns like this present a higher risk reward than patterns that get substantially narrower as time goes on as a pattern narrows the stop loss becomes smaller since the distance to the breakout point is smaller yet the profit target is still based on the largest part of the pattern the difference between an ascending triangle and a descending trianglethese two types of triangles are both continuation patterns except they have a different look the descending triangle has a horizontal lower line while the upper trendline is descending this is the opposite of the ascending triangle which has a rising lower trendline and a horizontal upper trendline limitations of trading the ascending trianglethe main problem with triangles and chart patterns in general is the potential for false breakouts the price may move out of the pattern only to move back into it or the price may even proceed to break out the other side a pattern may need to be redrawn several times as the price edges past the trendlines but fails to generate any momentum in the breakout direction while ascending triangles provide a profit target that target is just an estimate the price may far exceed that target or fail to reach it psychology of the ascending trianglelike other chart patterns ascending triangles indicate the psychology of the market participants underlying the price action in this case buyers repeatedly drive the price higher until it reaches the horizontal line at the top of the ascending triangle the horizontal line represents a level of resistance the point where sellers step in to return the price to lower levels as the price drops downward from the horizontal resistance level buyers begin to show their resolve and the price fails to reach the recent low with the trend turning upward once again at a higher swing low in other words the upward sloping trendline that forms the lower boundary of the ascending triangle is acting as support the level where buyers jump in and prevent the price from falling any lower in a well defined ascending triangle pattern the price bounces between the horizontal resistance line and the lower trendline the lines of the triangle eventually converge setting the stage for a showdown between upward and downward pressure that could determine which direction the price will move out of the pattern as it approaches the vertex of the triangle the price will either break out above the resistance level suggesting additional gains ahead or it will fall below the support level increasing the likelihood that the price will decline 