GBPAUD 4H ASCENDING TRIANGLE PATTERN STRATEGY
Step #1: The Ascending Triangle must Have a Flat Resistance and a Rising Support Trendline
The two elements of a good ascending triangle pattern are:
A flat resistance that it’s hit multiple times. The more a resistance line is tested, the more likely it will eventually fail to hold as resistance level.
The second element is a rising support trendline that connects the successive higher lows inside the ascending triangle formation.
Step #2: Apply the RSI 20-periods on your Chart
Normally, the price action consolidates inside the ascending triangle formation.This means that there is an ongoing battle between the bulls and the bears. Assessing who is going to win this battle can be done by looking the RSI readings.
Before the breakout to come we can look at the action inside the consolidation to decide if it’s worth taking the breakout or it’s better to just wait for another trade.
What we want to see is momentum decreasing after each successive retest of the flat resistance level. Basically, we look to see a bearish divergence developing on the RSI indicator.
Step #3: Check if prior to the Ascending Triangle we have a bullish trend
As a continuation pattern, naturally we need a preceding trend. In the case of the ascending triangle, which is a bullish pattern, we need to have a prior uptrend.
If we have a prior uptrend, it suggests that the breakout has a higher probability to happen on the upside.
Step #4: Buy as soon as we break above the flat resistance level
With continuation patterns, the best strategy is to buy straight away with the breakout. If we wait too much we end up leaving some of the available profits on the table.
We already have so many confluence factors that confirm the breakout that it’s useless to wait for more confirmation. After all we want to anticipate the breakout and be ahead of the crowd.
Step #5: Find your own take profit or For the take profit strategy, we’re going to use our favorite measuring technique. This is a dynamic strategy that it’s based on the actual price rather than random number.
To find the profit target, simply the the high and the low of the ascending triangle formation and add that measurement to the breakout level which will give you the ideal target for this continuation pattern.
The two elements of a good ascending triangle pattern are:
A flat resistance that it’s hit multiple times. The more a resistance line is tested, the more likely it will eventually fail to hold as resistance level.
The second element is a rising support trendline that connects the successive higher lows inside the ascending triangle formation.
Step #2: Apply the RSI 20-periods on your Chart
Normally, the price action consolidates inside the ascending triangle formation.This means that there is an ongoing battle between the bulls and the bears. Assessing who is going to win this battle can be done by looking the RSI readings.
Before the breakout to come we can look at the action inside the consolidation to decide if it’s worth taking the breakout or it’s better to just wait for another trade.
What we want to see is momentum decreasing after each successive retest of the flat resistance level. Basically, we look to see a bearish divergence developing on the RSI indicator.
Step #3: Check if prior to the Ascending Triangle we have a bullish trend
As a continuation pattern, naturally we need a preceding trend. In the case of the ascending triangle, which is a bullish pattern, we need to have a prior uptrend.
If we have a prior uptrend, it suggests that the breakout has a higher probability to happen on the upside.
Step #4: Buy as soon as we break above the flat resistance level
With continuation patterns, the best strategy is to buy straight away with the breakout. If we wait too much we end up leaving some of the available profits on the table.
We already have so many confluence factors that confirm the breakout that it’s useless to wait for more confirmation. After all we want to anticipate the breakout and be ahead of the crowd.
Step #5: Find your own take profit or For the take profit strategy, we’re going to use our favorite measuring technique. This is a dynamic strategy that it’s based on the actual price rather than random number.
To find the profit target, simply the the high and the low of the ascending triangle formation and add that measurement to the breakout level which will give you the ideal target for this continuation pattern.
Comment:
TP hit with wick
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