Triangles

What it is

A triangle forms when price makes a series of smaller swings, squeezing into a point. An ascending triangle has a flat top and rising lows (usually bullish); a descending triangle has a flat bottom and falling highs (usually bearish); a symmetrical triangle has both sides converging.

How to spot it

• At least two touches on each line.
• Swings get smaller as price moves into the apex.

How to use it

• Trade the close outside the triangle, ideally in the trend's direction, with the stop inside the pattern.
• The flat side of an ascending or descending triangle is a pool of stops, so breaks through it can be fast.

Common mistakes

• Trading inside the triangle where moves are small and random.
• Chasing a break that happens right at the apex, where it often fails.

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