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How Can You Use the Ascending Triangle in Trading?How Can You Use the Ascending Triangle in Trading? An ascending triangle is a chart pattern traders rely on to identify potential breakouts and further price movements. Recognised for its versatility, this pattern can signal trend continuations across all types of markets, including stocks, forex, commodities, and cryptocurrencies*. In this article, we’ll break down how to spot and trade this formation. What Is an Ascending Triangle? An ascending or rising triangle is a bullish chart pattern that usually signals a trend continuation. It is framed by two trendlines. The upper line connects highs placed at almost the same level, while the lower line is angled and connects higher lows. The triangle’s appearance is explained as follows: buyers try to push the price up, but they meet a strong resistance level, so the price rebounds. Still, buyers have strength, which is reflected in higher lows. Therefore, they continue pushing the price until it breaks above the resistance level. The period during which the price bounces back and forth between the two lines depends on the timeframe. On daily charts, the triangle can be in place for over a week. Note: The ascending triangle is a continuation chart pattern but sometimes it can be used as a reversal signal. It happens when the ascending triangle occurs in a downtrend. It’s the biggest challenge of all the triangles. The rising triangle is one of the setups in the triangle group. There are also descending and symmetrical formations. Ascending, Descending, and Symmetrical Triangles: The Differences The triangle group of patterns comprises ascending, descending, and symmetrical formations. The ascending triangle is a bullish formation and the descending triangle is bearish. At the same time, the symmetrical triangle is a bilateral setup that signals a rise and a fall in the price. To distinguish between them, traders draw trendlines. In a rising triangle pattern, an upper trendline is horizontal and connects equal or almost equal highs, while the lower trendline is rising as it connects higher lows. In a descending or falling triangle pattern, the lower trendline is horizontal and connects equal or almost equal lows, while the upper trendline declines, going through lower highs. A symmetrical triangle has a falling upper line that connects lower highs and a rising lower line that connects upper lows. How Traders Spot the Ascending Triangle It’s quite easy to identify the formation on a chart. Still, there are a few rules that may help a trader determine its strength. - The trend strength. Although the setup may appear on any timeframe, traders look for strong long-term trends as risks of a fakeout on low charts are higher. - Consolidation. Triangles appear when the market consolidates within an overall trend. - Trendlines. Trendlines must be drawn through at least two points. Still, the larger the number of points, the higher the possibility the setup works. - Breakout. Can the ascending triangle pattern be bearish? No. It is a bullish formation that appears in a bullish and a bearish trend but always signals a potential price rise. How Can You Trade Ascending Triangles? The rising triangle pattern is usually considered a continuation setup formed in an uptrend. Still, if the ascending triangle is in a downtrend, it may signal a trend reversal. The trading rules will be the same in both cases. As with most chart patterns, triangles have specific rules that help traders place entry and exit points. Entry The theory suggests trades go long when the price breaks above the setup's upper boundary. In a conservative approach, traders wait for the price to form at least several candles before entering the market. In a risky strategy, traders open a position as soon as the breakout occurs, and the breakout candlestick closes. It's worth considering trading volumes as breakouts often turn into fakeouts, meaning the market returns to its previous trend. The chance of a strong breakout is higher if the volumes are high. However, increased volumes aren't the only tool used to confirm a breakout. Many traders consider trend indicators and oscillators to potentially limit the risks of bad trading decisions. - If the triangle serves as a continuation setup, it may be helpful to look at the signals of trend-strength indicators, including the average directional index. - If traders use the ascending triangle as a reversal setup, they usually implement indicators that may signal a trend reversal, including the moving average, the relative strength index, the moving average convergence divergence, and the stochastic oscillator. Take Profit A standard take-profit target equals the size of the largest part of the setup and is measured just from the breakout trendline. Stop Loss Traders consider several options when placing stop-loss levels. In a conservative approach, they implement the risk/reward ratio, which is usually 1:2 or 1:3 but depends on the trader's willingness to take risks. Also, traders utilise the upper trendline as a threshold and place the stop-loss order just under it. Note: These are general rules. However, traders can develop their own trading strategies and adjust the pattern's parameters and rules according to their trading approach. Ascending Triangle: Strategy In this strategy, traders observe an existing bullish trend and the formation of an ascending triangle, which suggests the potential for a continuation pattern. Incorporating a short-term moving average, such as a 9-period EMA, provides dynamic support, aligning with the trendline to strengthen the setup. Entries - Traders typically wait for the price to break through the top trendline of the ascending triangle. - A strong candle breaking the resistance level adds confidence, though any move above the top trendline can serve as an entry signal. - The price should also trade above the moving average, offering additional confirmation. - An order is often placed at the top trendline, anticipating a retracement to this level, which now acts as support. Stop Loss - Traders place a stop-loss below the most recent swing low within the triangle. - For more conservative traders, the stop may be set at any prior swing low, depending on risk tolerance. Take Profit - Many traders aim for a risk-reward ratio of 1:2 or 1:3. - Profits might also be taken at the next strong resistance level, aligning with the market structure. Rising Triangle: Benefits and Drawbacks This formation has advantages and pitfalls that traders consider when developing their strategies. Benefits - It can be used on any timeframe. Triangles are formed on charts of any period. Still, they might be more effective if the setup appears in a solid trend on a high timeframe. - It can be used for any asset. Another advantage is that the ascending triangle pattern is used for stock, commodity, cryptocurrency*, and Forex trading. - Easy to spot. A trader only needs to draw two trendlines to define this setup on the chart. - Exact entry and exit points. Although traders can develop their entry and exit points, the setup assumes there are specific rules traders with any experience utilise. Drawbacks - It can confuse traders. As the rising triangle is used as a reversal and continuation formation, traders with less experience may be confused with its signals. - False breakouts. The setup works when a price breakout occurs. However, there is a high risk the breakout will appear to be a fakeout, and the price will return. - The pattern may fail. Aside from a fakeout, there is another risk when trading with triangles. The price may break another side of the formation, and the formation will fail. - The trading rules may not work. Although specific rules indicate where a trader should place entry and exit points, buyers may be too weak to push the price to the take-profit target. Final Thoughts The ascending triangle is one of the more common chart patterns traders use when trading various assets. Still, there is no 100% guarantee that it will work every time you spot it on a price chart. It's vital to remember that every signal must be confirmed with other indicators, chart patterns, and candlesticks. Also, it's a well-known fact that any trade involves risks that should be considered every time a trader enters the market. Improve your skills by practising on different assets and timeframes. FAQ How Do You Form an Ascending Triangle? An ascending triangle is formed when the price action creates a series of higher lows while facing a resistance level, resulting in a horizontal upper trendline and a rising lower trendline. The price consolidates between these two lines before potentially breaking out above the resistance, signalling a bullish continuation. Is an Ascending Triangle Bullish or Bearish? The ascending triangle is a bullish pattern. It suggests that buyers are gaining strength as higher lows form, increasing the likelihood of a breakout above the resistance level. There is a descending triangle pattern that usually appears in a downtrend, signalling a downward movement. How to Enter an Ascending Triangle? According to the theory, in triangle pattern trading, it’s common to enter the market when the price breaks above the upper trendline of the triangle. In a conservative approach, traders wait for confirmation through several closing candles after the breakout. The increased volume also adds confidence to the trade. What Is the Ascending Triangle Pattern Retest? A retest occurs when the price breaks out of the triangle but then briefly falls back to test the former resistance level. A successful retest confirms the breakout and can provide an additional entry point. How Long Does an Ascending Triangle Pattern Take to Form? The formation of a bullish triangle pattern can vary based on the timeframe. On daily charts, it can take several days to weeks, while on shorter timeframes, it might form within hours. What Is the Difference Between an Ascending Triangle and a Rising Wedge? In comparing the ascending triangle vs. the rising wedge, it’s key to recognise that the rising wedge has converging trendlines, signalling a possible weakening trend, often leading to a bearish reversal. In contrast, an ascending triangle trading pattern typically signals a continuation of the uptrend. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Learn These Patterns And You'll Never Regret It EVERYTHING ON THE TRIANGLE PATTERN a triangle chart pattern involves price moving into a tighter and tighter range (like a consolidation phase which has a triangle-like shape) as time goes by and provides a visual display of a battle between bulls and bears. The triangle pattern is generally categorised as a “continuation pattern”, meaning that after the pattern completes, it’s assumed that the price will continue in the trend direction it was moving before the pattern appeared. note: the triangle pattern depends on the trend however don't hold on to that thought since fake-outs are possible. the point i am trying to make is that you should not be obsessed with which direction the price goes, but you should be ready for movement in either direction. there are three triangle patterns: a) the ascending (upward slope consisting of higher-lows and a consistent resistance), b) descending (downward slope consisting of lower-highs and a consistent support) c) symmetrical (equal slopes the market is forming lower-highs and higher-lows).. the triangle is different from a wedge. however, a wedge can be in a triangle or better put the general formation of a wedge is a triangle-like shape (in some cases). point to note: • you need at least two points (bullish or bearish) to connect for a triangle to be considered, and a consistent support or resistance. • the volatility of price of any instrument decreases when there's a triangle pattern and increases on breakout of the pattern. • measuring the size of the triangle can serve as a good profit target (will explain in meeting) • keep an open mind at all times. 📝..

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Triangle Chart Patterns: How to Identify and Trade Them Triangle Chart Patterns: How to Identify and Trade Them Triangle chart patterns are essential tools in technical analysis, helping traders identify potential trend continuations. These formations build as the price consolidates between converging trendlines, signalling an upcoming move in the market. In this article, we’ll explore the three types of triangle patterns—symmetrical, ascending, and descending—and how traders use them to analyse price movements. What Are Triangle Chart Patterns? Triangle chart patterns are a common tool used to understand price movements in the market. These patterns form when the price of an asset moves within two converging trendlines, creating a triangle shape on a chart. The lines represent support and resistance levels, and as they get closer together, it signals a potential breakout in one direction. Symmetrical, ascending, and descending are three types of triangle patterns. Each of these patterns reflects a different market sentiment, with symmetrical triangles showing indecision, ascending triangles suggesting a bullish bias, and descending triangles hinting at bearish momentum. These formations are useful because they help traders spot potential breakouts, where the price might move sharply up or down after a period of consolidation. It’s important to note that triangles and wedge patterns are similar but not the same. Both patterns involve converging trendlines, but wedges tend to slope upward or downward. Triangles, on the other hand, either feature one horizontal trendline and a sloping trendline or two sloping trendlines at roughly the same angle. Below, we’ll cover the three triangle types. If you’d like to follow along, head over to FXOpen and TradingView to get started with real-time charts. Symmetrical Triangle The symmetrical triangle is a popular chart pattern that shows up when the price of an asset starts consolidating within a tighter range. Unlike other triangle patterns, it doesn’t lean heavily in either direction—bullish or bearish—making it a neutral signal. It forms when buyers and sellers are in a bit of a standoff, with no clear trend in sight. However, this period of indecision often leads to a significant move once the price breaks out of the pattern. What Does It Look Like? - Two converging trendlines; - One sloping down from the highs (resistance); - One sloping up from the lows (support); - The price oscillates between these two lines, forming lower highs and higher lows; - The formation narrows as the lines get closer together, creating a point of breakout. What Does It Indicate? A symmetrical triangle pattern indicates a period of indecision in the market. Buyers and sellers are evenly matched, causing the price to move within a narrowing range. As it gets smaller, the pressure builds, and the price is likely to break out either up or down. Since the formation is neutral, the breakout could occur in either direction, and traders wait for this moment to see where the market is heading. How Do Traders Use It? Traders typically watch for a breakout from the symmetrical triangle to signal the next significant price movement. They often look for an increase in trading volume alongside the breakout, as this can confirm the strength of the move. In most cases, it’s used as a signal for potential price continuation. However, some traders see it as a reversal indicator, depending on what the preceding trend looks like. Ascending Triangle An ascending triangle is a bullish triangle pattern that’s often looked for when analysing potential price breakouts. It usually forms during an uptrend but may also appear in a downtrend. It suggests that buyers are becoming more aggressive, while sellers are struggling to push the price lower, creating a situation where the market might break upwards. What Does It Look Like? - A horizontal resistance line at the top (price struggles to break above this level); A rising trendline at the bottom, connecting higher lows (buyers are stepping in earlier each time); - The price moves between these two lines, creating a triangle shape; - The formation narrows over time, putting pressure on the resistance level. What Does It Indicate? An ascending triangle pattern signals that buyers are gaining control. While the price keeps hitting a ceiling (resistance), the higher lows show that the market’s buying pressure is increasing. This often leads to a breakout above the resistance level, where the price can make a significant upward move. Traders usually see this formation as a sign that the market is primed for a continuation of the current uptrend. However, sometimes it can appear in a downtrend and signal a trend reversal. How Do Traders Use It? Traders typically use the ascending triangle to spot potential breakouts above the resistance level. When the price finally moves and closes above this line, it’s seen as confirmation that the upward trend is continuing. Many also pay close attention to the trading volume during this breakout—rising volume can confirm that the breakout is genuine. In some cases, the price may break through the resistance quickly, while in others, it could take time before the upward move happens. There may also be false breakouts before the true bullish move occurs, with the price typically closing below resistance. Descending Triangle A descending triangle is a bearish chart pattern that signals potential downward movement in the market. It typically forms during a downtrend but can also appear in an uptrend. It shows that sellers are becoming more dominant, while buyers are struggling to push the price higher, which could lead to a breakdown below a key support level. What Does It Look Like? - A horizontal support line at the bottom (price struggles to break below this level); - A descending trendline at the top, connecting lower highs (sellers are pushing the price down); - The price moves between these two lines, creating a triangle shape; - The formation narrows over time, with the pressure building on the support level. What Does It Indicate? A descending triangle chart pattern suggests that sellers are in control. While the price holds at the support level, the series of lower highs shows that selling pressure is increasing. This often leads to a breakdown below the support line, where the price might experience a sharp decline. Traders see the formation as a bearish signal, indicating that the market could continue its downward trend. How Do Traders Use It? Traders typically use the descending triangle to identify potential breakdowns below the support level. When the price falls and closes below this line, it’s considered confirmation that the sellers have taken over and that further downside movement could follow. Similar to other triangle patterns, it’s common to watch for a rise in trading volume during the breakdown, as it can confirm the strength of the move. It’s also possible to see false breakouts below the support level when the price closes back inside the pattern almost immediately. How Traders Use Triangle Patterns in Technical Analysis These patterns are just one piece of the puzzle in technical analysis, but they can offer us valuable insights when used correctly. Triangle Pattern Trading: Entry, Stop-Loss, and Profit Targets Entry Points Traders typically wait for a confirmed breakout from the triangle formation’s boundaries before entering a trade. For ascending triangles, this means watching for the price to break above the upper trendline (resistance), while for descending triangles, they look for a breakdown below the lower trendline (support). In a symmetrical triangle, the breakout may be in either direction, usually informed by the broader market trend. The entry is often confirmed by a closing candle above or below these key levels to reduce the risk of false breakouts. Stop-Loss Placement Stop-loss orders are crucial here. For ascending triangles, stop losses might be placed just below the last swing low, while for descending triangles, they might be set just above the recent swing high. In the case of symmetrical triangles, traders often place the stop-loss just outside the formation’s apex. Profit Targets To set profit targets, traders typically use the triangle's height (the distance between the highest and lowest points). This height is then projected from the breakout point, offering a realistic target for the trade. For example, if a triangle stock pattern’s height is $10 and the breakout occurs at $50, the target would be $60 for a bullish move. Combining with Market Context Triangles may become more reliable when considered in the context of the broader market environment. Traders don’t just look at the pattern in isolation—they analyse the prevailing trend, market sentiment, and even macroeconomic factors to gauge whether a breakout aligns with the larger market movement. For instance, an ascending formation in a strong uptrend adds confidence to the idea of a bullish breakout. Using Other Indicators for Confirmation While triangles provide a useful framework, they’re usually combined with other technical indicators for confirmation. Traders often align triangles with volumes, moving averages, or momentum indicators to assess whether the breakout has strong support behind it. For instance, a breakout confirmed by high volume or a moving average crossover might add confluence to the trade. Limitations and Considerations of Triangle Patterns Triangles are useful tools in technical analysis, but they come with limitations and important considerations. While they can signal potential breakouts, it’s essential to approach them cautiously. - False Breakouts: Triangles often experience false breakouts, where the price briefly moves beyond the trendline but quickly reverses. This may trap traders in unfavourable positions. - Subjectivity: These formations are open to interpretation. Different people may draw trendlines slightly differently, leading to varying conclusions about where the breakout occurs. - Need for Confirmation: Relying solely on patterns can be risky. They may work better when combined with other indicators, such as volume or moving averages, to confirm the trend direction. - Market Conditions: In volatile or news-driven markets, chart patterns may not behave as expected, reducing their reliability. They may provide false signals or lose significance in these situations. The Bottom Line Triangle chart patterns are popular tools among those looking to analyse market movements and potential breakouts. Whether it’s a symmetrical, ascending, or descending triangle, these patterns provide valuable insights into price consolidation and future trends. While no pattern guarantees a winning trade, combining triangles with other indicators may improve market analysis. Ready to apply your knowledge? Open an FXOpen account to explore chart patterns in more than 700 live markets and take advantage of our low-cost, high-speed trading environment backed by advanced trading platforms. FAQ What Is a Triangle Chart Pattern? A triangle chart is a pattern in technical analysis that forms when the price of an asset moves between converging trendlines, creating a triangle shape on a price chart. They typically signal a period of consolidation before a strong potential breakout in price. What Are the Patterns of Triangles? There are three main types of triangles in chart patterns: symmetrical, ascending, and descending. Symmetrical triangles indicate indecision in the market while ascending triangles are often bullish, and descending triangles tend to be bearish. How to Trade a Triangle? Traders typically wait for a confirmed breakout from the triangle’s trendlines. According to theory, entry points are based on a breakout above resistance or below support, with stop-loss orders placed just outside the triangle. Profit targets are often set based on the height (the distance between the highest and lowest points) of the pattern. What Is the Triangle Pattern Strategy? The triangle pattern strategy involves waiting for a breakout and using the formation’s height to set profit targets. It’s combined with tools like volume, moving averages, and momentum indicators to confirm the move and avoid false breakouts. Is the Triangle Pattern Bullish or Bearish? They can be both bullish and bearish. Ascending triangles are generally seen before a bullish movement, descending triangles are bearish, and symmetrical triangles can be either. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Bitcoin Seasonality - Best Month (October) and Best Day (Monday)It's very important for every Bitcoin trader to know its seasonality because this will significantly increase the probability of successful trades. I have been trading Bitcoin for almost 10 years, and I successfully use seasonality patterns to predict Bitcoin price movements. For example, you don't want to go long on Bitcoin during August or September; that's probably a very bad idea. The biggest market crashes usually happen in September. But you definitely want to go long in October or April, as these months are the most promising. Knowledge of these patterns will give you an advantage over standard retail traders. Every trade matters. Average return by Month (%) January: +5.1% February: +12.1% March: +4.8% April: ˇ+18.7% May: +14.2% June: +4.4% July: +6.1% August: -3.1% September: -8.4% October: +22.2% November: +17.9% December: +7.3% Average return by Weekday (%) Monday: +0.63% Tuesday: +0.18% Wednesday: +0.54% Thursday: +0.40% Friday: +0.37% Saturday: +0.45% Sunday: +0.10% Currently I am bullish on Bitcoin as the price is in an uptrend and the bear market is not confirmed; I expect Bitcoin to hit 115k probably at the end of February. What I also expect is an alt season - alt season is starting right now! So it's time to buy some altcoins. Ethereum should outperform BTC in the next weeks as well. Write a comment with your altcoin, and I will make an analysis for you in response. Also, please hit boost and follow for more ideas. Trading is not hard if you have a good coach! This is not a trade setup, as there is no stop-loss or profit target. I share my trades privately. Thank you, and I wish you successful trades!

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ETH | Alternative Chart Pattern | Education Just a short update for my latest C&H post Price is also forming an Ascending Triangle pattern with a liquidity zone of $2,800 - $3,000 for an average spot for buyer to step in When trading chart patterns it's best to figure out how to jump in before the breakout similarly to the last touches highlighted in blue on the bottom trendline You can see that price was forming a bottom-like pattern or what I also like to call price accumulation and then vice versa for the tops.

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Ascending Triangle in Nikkei/Yen Futures: A 2025 Bullish Setup?1. Introduction The Nikkei/Yen Futures, a crucial instrument for traders aiming to capture movements in Japan’s equity index and its currency dynamics, presents an intriguing setup as we step into 2025. An ascending triangle pattern, a classic bullish formation, is emerging on the chart, signaling a potential breakout to the upside. Adding to the technical allure is the depletion of sell unfilled orders (UFOs) within a significant price zone between 40,420 and 39,685. This critical area, revisited six times since late July 2024, has seen a steady reduction of unfilled sell orders, opening the possibility for bullish momentum to dominate. With the price currently hovering near the 39,685 level, the stage appears set for a breakout opportunity. 2. The Technical Setup The ascending triangle, characterized by a series of higher lows converging toward a horizontal resistance level, often signifies bullish pressure. In the case of the Nikkei/Yen Futures, the horizontal resistance resides near 39,685, the lower boundary of a key sell UFO zone. This resistance has been tested repeatedly since July 2024, with each revisit chipping away at the sell orders within the zone. Such behavior suggests diminishing selling pressure, setting the foundation for a breakout. The anticipated target for this breakout, calculated using Fibonacci projection, is set at 41,380—aligning with historical price action and technical projections. Key Contract Specifications: o Regular Nikkei/Yen Futures (NIY1!) Contract Size: ¥500 x Nikkei 225 index Tick Size: ¥5 Point Value: ¥2,500 Margin Requirement: Approx. $ 1,500,000 JPY o Micro Nikkei/Yen Futures (MNI) Contract Size: ¥50 x Nikkei 225 index Tick Size: ¥5 Point Value: ¥250 Margin Requirement: Approx. $ 150,000 JPY These details ensure accessibility for both institutional and retail traders, with the micro contract enabling smaller capital commitments while maintaining exposure to the same underlying asset. 3. Forward-Looking Trade Plan The technical evidence supports a bullish trade plan for Nikkei/Yen Futures: Trade Direction: Long Entry Price: Above 39,685, confirming a breakout from the resistance level. Target Price: 41,380, based on Fibonacci projections. Stop Loss: 39,120, targeting a 3:1 reward-to-risk ratio to manage risk effectively. Reward-to-Risk Ratio: 3:1 (Calculated: 41,380 - 39,685 = 1,695 reward; 39,685 - 39,120 = 565 risk). The trade parameters apply to both the standard and micro contracts, offering flexibility in position sizing. Traders with smaller accounts may opt for the micro contract to manage margin requirements while engaging in this high-potential setup. 4. Importance of Risk Management Risk management remains the cornerstone of any successful trading strategy, particularly when trading leveraged instruments like futures. Here are key considerations for managing risk in the Nikkei/Yen Futures trade setup: Stop-Loss Orders: Placing a stop-loss at 39,120 ensures a predefined risk level, protecting traders from unexpected market reversals. It’s vital to adhere to this level to maintain discipline and avoid emotional decision-making. Position Sizing: The availability of micro contracts (MNIY1!) allows traders to tailor their position size according to their account size and risk tolerance. For example, trading one micro contract involves a significantly smaller margin commitment compared to the regular contract, making it suitable for retail traders. Defined Risk Exposure: Leveraged products like futures can lead to substantial losses if risk is not clearly defined. Using stop-loss orders and trading within calculated risk parameters prevents the potential for undefined losses. Precise Entries and Exits: Setting the entry above 39,685 ensures a systematic approach to triggering the trade based on the expected breakout. Similarly, targeting 41,380 using Fibonacci projections ensures that profit objectives align with technical analysis rather than arbitrary levels. By prioritizing these aspects, traders can mitigate risks while maximizing the potential reward from this bullish setup. 5. Closing Remarks The Nikkei/Yen Futures seem to be poised for a potential breakout as we enter 2025, driven by a combination of technical factors and diminishing sell-side unfilled orders. The ascending triangle formation strengthens the bullish bias, with the calculated Fibonacci projection of 41,380 offering an attractive target. Both the standard and micro contracts cater to different trader profiles, allowing participation regardless of account size. As the price approaches the critical 39,685 level, traders are encouraged to stay vigilant, using real-time CME data to track developments and validate entry triggers. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.

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Ascending Triangle Pattern Tutorial: 3/8 Bullish Patterns Ascending Triangle Pattern Tutorial: 3/8 Bullish Patterns An ascending triangle is a bullish continuation chart pattern that signals the potential for an upward breakout. Here's how it forms: Flat Upper Trendline: The upper trendline is flat, indicating a resistance level where the price consistently faces selling pressure and fails to move higher. Rising Lower Trendline: The lower trendline is ascending, showing higher lows as buyers step in at increasingly higher prices. Price Convergence: The price action gets squeezed between the two trendlines, leading to a tightening range. Breakout: Eventually, the price breaks above the resistance level, indicating a continuation of the upward trend. This breakout is typically accompanied by a surge in volume. Ascending triangles are popular among traders because they offer clear entry and exit points. The height of the triangle, measured from the base to the horizontal resistance, can be used to estimate the potential price target following the breakout. LIKE l FOLLOW l SHARE

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Symmetrical Triangle Pattern what is it/ how to draw it? 2/8 Symmetrical Triangle Pattern what is it/ how to draw it? 2/8 Bullish Charting Patterns A symmetrical triangle is a chart pattern that forms when the price of an asset converges with two trendlines that are moving towards each other, creating a triangular shape. Here’s how it works: Converging Trendlines: The upper trendline is formed by connecting the descending highs, and the lower trendline is formed by connecting the ascending lows. These trendlines converge at a point called the apex. Volume Decrease: As the pattern develops, trading volume typically decreases, indicating a period of consolidation and indecision in the market. Breakout: Eventually, the price breaks out from the triangle, which can occur in either direction – upwards or downwards. The direction of the breakout often dictates the future trend of the asset. Symmetrical triangles are considered continuation patterns, meaning they usually signal that the prevailing trend (upward or downward) before the pattern will continue after the breakout. Traders often use the height of the triangle (the distance between the initial high and low points) to estimate the potential price target following the breakout. Like l Follow l Share Stay tuned for the other 6 BULLISH CHARTING PATTERNS

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Best Price Action Pattern For GOLD Trend Following Trading This bullish pattern is very powerful . Being spotted on a daily/4h/1h, any time frame, it will help you to accurately predict a strong bullish movement on Gold . In this article, I will teach you to identify a buying volumes accumulation on Gold chart and as a bonus, I will show you how I predicted a recent bullish rally with this price action pattern. The initial point of this pattern will be a completion point of a strong bullish impulse. At some moment, the price finds a strong horizontal resistance, stops growing and retraces. The second point of the pattern will be a completion of a retracement. It should strictly be a higher low - it should be higher than the low of an initial bullish impulse. After a retracement, the price should return to a horizontal resistance and set an equal high , that will be the third point of the pattern. Then, the price should retrace AT LEAST one more time from a horizontal resistance and set a new higher low. After that, the price should set one more equal high. 3 equal highs and 2 higher lows will compose a bullish accumulation pattern. Please, note, that the price may easily set more equal highs and more consequent new higher lows and keep the pattern valid. Above is the example of a bullish accumulation pattern on Gold on an hourly time frame. The price set 3 equal highs and 3 consequent higher lows. This pattern will signify the weakness of sellers and the accumulation of buying volumes. The point is that each consequent bearish price movement from a resistance is weaker than a previous one. It means that fewer sellers are selling from the resistance and more buyers start buying, not letting sellers go lower. In our example, we can clearly see the consequent weakening, bearish price movements. This pattern indicates a highly probable breakout attempt of the resistance. A candle close above that provides a strong bullish signal. The broken resistance will turn into support and will provide a safe point to buy the market from. In our example, the market broke the underlined horizontal resistance and closed above that. It indicates the completion of a bullish accumulation and a highly probable bullish trend continuation. You can see that Gold retested a broken structure and then a strong bullish wave initiated. In a strong bullish market that we currently contemplation on Gold, this bullish pattern will provide a lot of profitable trading opportunities. No matter whether you are scalping, day trading or swing trading Gold, this bullish accumulation pattern will help you to predict long-term, mid-term and short-term bullish movements. ❤️Please, support my work with like, thank you!❤️

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by VasilyTrader

The Symmetrical Triangle: Real Success Rates + Breakout.The Symmetrical Triangle: Real Success Rates + Breakout. The symmetrical triangle is an important chart pattern in technical analysis, deserving special attention from professional traders. This formation is characterized by a convergence of prices between two trendlines, one descending and the other ascending, creating a consolidation zone where indecision between buyers and sellers is palpable. Statistical Analysis Empirical data reveals that the success rate of the symmetrical triangle for a trend continuation is approximately 54%. This percentage, although higher than 50%, underlines the importance of a cautious approach and rigorous risk management in using this pattern. Breakout Point The breakout of the symmetrical triangle usually occurs when the price has traveled approximately 75% of the distance to the apex. This point is crucial for traders, as it often represents the moment when volatility increases and a new trend can be established. Risks and False Exits It is essential to note that the symmetrical triangle has a relatively high rate of false exits. Statistics indicate that approximately 13% of cases in a bear market can result in a false exit to the bottom. This phenomenon underlines the need for additional confirmation before entering a position. Strategy of use To effectively exploit the symmetrical triangle, professional traders must: -Identify the formation accurately. -Wait for the breakout near the point of convergence of the trendlines. -Confirm the breakout with other technical indicators or an increase in volume. -Put in place strict risk management to protect against false exits. In conclusion, the symmetrical triangle, although being a valuable tool in the trader's arsenal, requires a methodical approach and a thorough understanding of its characteristics to be used effectively in a trading strategy.

Education

by Le-Loup-de-Zurich

Actual Success Rates of Ascending and Descending Triangles Actual Success Rates of Ascending and Descending Triangles Here is an analysis of the actual success rates of ascending and descending triangles in trading, based on the information provided: Success Rates Ascending and descending triangles generally have fairly high success rates as continuation patterns: -The ascending triangle has a success rate of approximately 72.77%. -The descending triangle has a slightly higher success rate of 72.93%. These numbers come from a study that tested over 200,000 price patterns over a 10-year period. Factors Influencing Success Several factors can influence the success rate of these patterns: -The trader's ability to execute the strategy correctly -Market conditions at the time the triangle formed -Market liquidity -Overall market sentiment Important Points to Consider -Triangles are considered reliable continuation patterns, especially in trending markets. -The ascending triangle in an uptrend is statistically more reliable than the descending triangle. -To validate the pattern, the price must touch at least twice each of the upper and lower lines. -An increase in volume during the breakout is an important confirmation sign. Strategies to improve the chances of success -Wait for the triangle to fully form before entering a position1. -Confirm the breakout with a close above/below the resistance/support level. -Use additional technical indicators to confirm the signal. -Pay attention to the volume, which should increase during the breakout. Conclusion Although ascending and descending triangles have relatively high success rates, it is important to use them in conjunction with other technical analysis tools and to take into account the overall market context to maximize the chances of success.

Education

by Le-Loup-de-Zurich

Profitable Triangle Trading Strategy Explained Descending triangle formation is a classic reversal pattern . It signifies the weakness of buyers in a bullish trend and bearish accumulation . In this article, I will teach you how to trade descending triangle pattern. I will explain how to identify the pattern properly and share my trading strategy. ⭐️ The pattern has a very peculiar price action structure : 1. Trading in a bullish trend, the price sets a higher high and retraces setting a higher low . 2. Then the market starts growing again but does not manage to set a new high, setting a lower high instead. 3. Then the price drops again perfectly respecting the level of the last higher low, setting an equal low . 4. After that, one more bullish movement and one more consequent lower high , bearish move, and equal low . Based on the last three highs , a trend line can be drawn. Based on the equal lows , a horizontal neckline is spotted. ❗What is peculiar about such price action is the fact that a set of lower highs signifies a weakening bullish momentum : fewer and fewer buyers are willing to buy from horizontal support based on equal lows. 🔔 Such price action is called a bearish accumulation . Once the pattern is formed it is still not a trend reversal signal though. Remember that the price may set many lower highs and equal lows within the pattern. The trigger that is applied to confirm a trend reversal is a bearish breakout of the neckline of the pattern. 📉Then a short position can be opened. For conservative trading, a retest entry is suggested. Safest stop is lying at least above the level of the last lower high. However, in case the levels of the lower highs are almost equal it is highly recommendable to set a stop loss above them all. 🎯For targets look for the closest strong structure support. Below, you can see the example of a descending triangle trade that I took on NZDCAD pair. After I spotted the formation of the pattern, I was patiently waiting for a breakout of its neckline. After a breakout, I set a sell limit order on a retest. Stop loss above the last lower high. TP - the closest key support. 90 pips of pure profit made. Learn to identify and trade descending triangle. It is one of the most accurate price action patterns every trader should know.

Education

by VasilyTrader

MASTERING SYMMETRICAL TRIANGLES: A GUIDE FOR TRADERS 👀See the first 3 items on the chart👆 🔰Other details: ⭐D: ⭐E: ⭐F: ⭐G: 🔰Additional Considerations for Triangles: ⭐H: Number of Points: To construct a triangle, we need at least two HIGHS and two LOWS. Occasionally, triangles are formed using six points instead of the usual four. ⭐I: Validity Criterion: The BREAKOUT point (exit point) of a triangle should not be too close to the intersection of its upper and lower sides; otherwise, the triangle loses its validity.

Education

by Eldorado_Land

Symmetrical Triangle A symmetrical triangle is a chart formation where the slope of the price’s highs and the slope of the price’s lows converge together to a point where it looks like a triangle.

Education

Trading Diverging Chart Patterns Continuing our discussion on trading chart patterns, this is our next tutorial after Trading Converging Chart Patterns This tutorial is based on our earlier articles on pattern identification and classification. Algorithmic Identification of Chart Patterns Flag and Pennant Chart Patterns In this tutorial, we concentrate on diverging patterns and how to define rules to trade them systematically. The diverging patterns discussed in this tutorial are: Rising Wedge (Diverging Type) Falling Wedge (Diverging Type) Diverging Triangle Rising Triangle (Diverging Type) Falling Triangle (Diverging Type) 🎲 Historical Bias and General Perception Before we look into our method of systematic trading of patterns, let's have a glance at the general bias of trading diverging patterns. 🟡 The Dynamics of Diverging Wedge Patterns Diverging Wedge patterns are typically indicative of the Elliott Wave Structure's diagonal waves, potentially marking the ending diagonal waves. That means that the patterns may signal the ending of a long term trend. Hence, the diverging rising wedge is considered as bearish, whereas the diverging falling wedge is considered as bullish when it falls under Wave 5 of an impulse or Wave C of a zigzag or flat. For an in-depth exploration, refer to our detailed analysis in Decoding Wedge Patterns Both rising wedge and falling wedge of expanding type offers lower risk reward (High risk and low reward) in short term as the expanding nature of the pattern will lead to wider stop loss. 🎯 Rising Wedge (Expanding Type) Expanding Rising Wedge pattern is historically viewed with bearish bias. 🎯 Falling Wedge (Expanding Type) Expanding Falling Wedge pattern is historically viewed with bullish bias. 🟡 The Dynamics of Diverging Triangle Patterns Diverging pattern in general means increased volatility. Increased volatility during the strong trends also mean reducing confidence that may signal reversal. 🎲 Alternate Approach towards trading diverging patterns Lack of back testing data combined with subjectivity in Elliott wave interpretation and pattern interpretation makes it difficult to rely on the traditional approach. The alternative method involves treating all expanding patterns equally and define a systematic trading approach. This involves. When the pattern is formed, define a breakout zone. One side of the breakout zone will act as breakout point and the other side will act as reversal point. Depending on the breakout or reversal, trade direction is identified. Define the rules for entry, stop, target and invalidation range for both directions. This can be based on specific fib ratio based on pattern size. Backtest and Forward test the strategy and collect data with respect to win ratio, risk reward and profit factor to understand the profitability of patterns and the methodology. Breaking it down further. 🟡 Defining The Pattern Trade Conditions Base can be calculated in the following ways. Distance between max and min points of the pattern. (Vertical size of the pattern) Last zigzag swing of the pattern (This is generally the largest zigzag swing of the pattern due to its expanding nature) This Base is used for calculation of other criteria. 🎯 Breakout Zone - Entry Points Breakout zone can be calculated based on the following. Long Entry (top) = Last Pivot + Base * (Entry Ratio) Short Entry (bottom) = Last Pivot - Base * (Entry Ratio) If the direction of the last zigzag swing is downwards, then top will form the reversal confirmation and bottom will form the breakout confirmation. Similarly, if the direction of the last zigzag swing is upwards, then top will become the breakout confirmation point and bottom will act as reversal confirmation point. 🎯 Stops Long entry can act as stop for short and vice versa. However, we can also apply different rule for calculation of stop - this includes using different fib ratio for stop calculation in the reverse direction. Example. Long Stop = Last Pivot - Base * (Stop Ratio) Short Stop = Last Pivot + Base * (Entry Ratio) 🎯 Invalidation Invalidation price is a level where the trade direction for a particular pattern needs to be ignored or invalidated. Invalidation price can be calculated based on specific fib ratios. It is recommended to use wider invalidation range. This is to protect ignoring the potential trades due to volatility. Long Invalidation Price = Last Pivot - Base * (Invalidation Ratio) Short Invalidation Price = Last Pivot + Base * (Invalidation Ratio) 🎯 Targets Targets can either be set based on fib ratios, as explained for other parameters. However, the better way to set targets is based on expected risk reward. Target Price = Entry + (Entry-Stop) X Risk Reward 🟡 Back Test and Forward Test and Measure the Profit Factor It is important to perform sufficient testing to understand the profitability of the strategy before using them on the live trades. Use multiple timeframes and symbols to perform a series of back tests and forward tests, and collect as much data as possible on the historical outcomes of the strategy. Profit Factor of the strategy can be calculated by using a simple formula Profit Factor = (Wins/Losses) X Risk Reward 🟡 Use Filters and Different Combinations Filters will help us in filtering out noise and trade only the selective patterns. The filters can include a simple logic such as trade long only if price is above 200 SMA and trade short only if price is below 200 SMA. Or it can be as complex as looking into the divergence signals or other complex variables.

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Falling wedge aka continued pattern The formation of any triangle is a direction indication relevant to where you find it as some can be a warning if reversal. The market moves in grids(zones). Relevant to sentiment of traders and news. It always moves in wave 🌊 and in those waves we have patterns like ABCD resumption. Failure swings💰👃, 🐂 bullish breakouts, traps ECT. The thing is impulsive moves is where you want to be even though it may be a correction. The thing with that is only with rising wedge patterns that are confirmed by long wicked 🔨 that indicate a move to the downside and this is like I said the day being under pressure from all the wicks formed by sellers and buyers showing no strength or news keeping it suppressed. This is your classic break and retest strategy. Like I said the money is in the trend and the impulses is always where you want to be mostly breakouts from levels continuing with the direction of the day - down to MN if you that good. The SL of the pattern invalidates the idea and if any near term trails can be hit we get even better low entries. Remember your idea is only invalid when it doesn't hold weekly and MN TF key levels. This can also be seen by the RSI as it shows the strength of candlesticks relevant to highs and lows of the sessions. Risk management is key especially if you have an account from 2$-100$. We only increase size when the accounts over 250-500$ which will give you a chance at playing 0.05 not saying it isn't possible at 70$ but you risk blowing it faster than a single 0.01 that just loses 1-5$ depending how the setup looks. If you feel like it won't work the SL should be 100 pips of not 10-50 pips which is 0.30cents to 0.72c$ Entry will be a breakout. And anything playing and rejected in that area can be waited for a signal to go long. Obviously if you don't have money to blow on risk like a 0.01 and lose 20$ in one go than don't. You risk smaller that's why we wait for lows or zone to enter example 0.01 and a lose of 2-4$. You can always trade gold with a small amount and turn it to a lot thing is it will kick you out if you dont take profits or secure them in positive SL of 1_5$ The TP is usually the inside of the pattern or the impulse before. Remember wave move in 5-1-2-3-4 and five. 2-correction can't be a triangle so it's usually rectangle 4- correction Triangle 📐 and it moves up 3-the largest impulse bigger than wave1-&5, but never small than 1 1impulse can be an extension (1-2-3-4-5 wave in wave one ), 5 can be the same as ones length Now the thing about waves is the counting that gets difficult especially if the complex corrections. Therefore for m30, you play the day and if it doesn't hit one target or the second you positive SL and wait for better entries. Gold can make you bank if you play it right, I mean risk manage your account to small losses and close large ones you can always enter again another place a ladder positions. Please like if this education is helpful 🙏

Education

by GCGoldenCircle

Updated

Triangle Pattern Trading: A Trap for Newbies The triangle pattern is a popular chart pattern that is often used by technical analysts to identify potential breakout opportunities. However, traders should be aware that the triangle pattern can also be a trap for unsuspecting beginners. Why the Triangle Pattern is a Trap One of the reasons why the triangle pattern can be a trap is that it is a very subjective pattern. There are no hard and fast rules for identifying a triangle pattern, and what one trader might identify as a triangle pattern, another trader might not. Another reason why the triangle pattern can be a trap is that it is a very common pattern. This means that there are many opportunities for traders to trade this pattern, which can lead to overtrading. Overtrading is a common problem for beginners, and it can lead to significant losses. Smart Money Traders and the Triangle Pattern Smart money traders are aware of the fact that the triangle pattern can be a trap for beginners. They will often use this pattern to their advantage by creating false breakouts and trapping beginner traders into losing positions. Here are four examples of how smart money traders use the triangle pattern to trap beginners: NEO: formed a bullish triangle pattern. However, the price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. RVN: Rformed a symmetrical triangle pattern. The price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. DYDX: formed a descending triangle pattern. The price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. TRX: formed a bullish triangle pattern. However, the price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. How to Avoid the Triangle Pattern Trap There are a few things that traders can do to avoid the triangle pattern trap: Be aware of the subjectivity of the pattern. There are no hard and fast rules for identifying a triangle pattern, so traders should be careful not to get too caught up in trying to identify this pattern. Don't overtrade. The triangle pattern is a very common pattern, which means that there are many opportunities to trade this pattern. Traders should be careful not to overtrade this pattern, as this can lead to significant losses. Be aware of smart money traders. Smart money traders will often use the triangle pattern to their advantage by creating false breakouts and trapping beginner traders into losing positions. Traders should be aware of this and be careful not to fall for these traps. Conclusion The triangle pattern can be a useful tool for identifying potential breakout opportunities. However, traders should be aware that this pattern can also be a trap. By understanding the reasons why the triangle pattern can be a trap, and by taking steps to avoid these traps, traders can protect themselves from significant losses.

Education

by Yaroslav_Krasko

Trading Converging Chart Patterns We discussed identification and classification of different chart patterns and chart pattern extensions in our previous posts. Algorithmic Identification of Chart Patterns Flag and Pennant Chart Patterns In this installment, we shift our focus towards the practical trading strategies applicable to a select group of these patterns. Acknowledging that a universal trading rule cannot apply to all patterns, we narrow our examination to those of the converging variety. We will specifically address the following converging patterns: Rising Wedge (Converging Type) Falling Wedge (Converging Type) Converging Triangle Rising Triangle (Converging Type) Falling Triangle (Converging Type) This selection will guide our discussion on how to approach these patterns from a trading perspective. 🎲 Historical Bias and General Perception Each pattern we've discussed carries a historical sentiment that is widely regarded as a guideline for trading. Before we delve into our specific trading strategies, it's crucial to understand these historical sentiments and the general market interpretations associated with them. 🟡 The Dynamics of Contracting Wedge Patterns Contracting Wedge patterns are typically indicative of the Elliott Wave Structure's diagonal waves, potentially marking either the beginning or conclusion of these waves. A contracting wedge within a leading diagonal may experience a brief retracement before the trend resumes. Conversely, if found in an ending diagonal, it could signal the termination of wave 5 or C, possibly hinting at a significant trend reversal. The prevailing view suggests that these patterns usually precede a short-term directional shift: Rising Wedges are seen as bearish signals, while Falling Wedges are interpreted as bullish. It's essential to consider the trend prior to the formation of these patterns, as it significantly aids in determining their context within the Elliott Wave cycles, specifically identifying them as part of waves 1, A, 5, or C. For an in-depth exploration, refer to our detailed analysis in Decoding Wedge Patterns 🎯 Rising Wedge (Converging Type) The Rising Wedge pattern, historically viewed with a bearish bias, suggests that a downward trend is more likely upon a breakout below its lower trend line. This perception positions the pattern as a signal for traders to consider bearish positions once the price breaks through this critical support. 🎯 Falling Wedge (Converging Type) The Falling Wedge pattern is traditionally seen through a bullish lens, indicating potential upward momentum when the price surpasses its upper trend line. This established viewpoint suggests initiating long positions as a strategic response to such a breakout, aligning with the pattern's optimistic forecast. 🟡 Contracting Triangle Patterns Contracting Triangles, encompassing Converging, Ascending, and Descending Triangles, are particularly noteworthy when they appear as part of the Elliott Wave's B or 2 waves. These patterns typically signal a continuation of the pre-existing trend that preceded the triangle's formation. This principle also underpins the Pennant Pattern, which emerges following an impulse wave, indicating a pause before the trend's resumption. 🎲 Alternate Way of Looking into Converging Patterns Main issue with historical perception are: There is no clear back testing data to prove whether the general perception is correct or more profitable. Elliott Waves concepts are very much subjective and can be often difficult for beginners and misleading even for experts. So, the alternative way is to treat all the converging patterns equally and devise a method to trade using a universal way. This allows us to back test our thesis and be definitive about the profitability of these patterns. Here are our simple steps to devise and test a converging pattern based strategy. Consider all converging patterns as bidirectional. Meaning, they can be traded on either side. Thus chose to trade based on the breakout. If the price beaks up, then trade long and if the price breaks down, then trade short. For each direction, define criteria for entry, stop, target prices and also an invalidation price at which the trade is ignored even without entry. Backtest and Forward test the strategy and collect data with respect to win ratio, risk reward and profit factor to understand the profitability of patterns and the methodology. Now, let's break it further down. 🟡 Defining The Pattern Trade Conditions Measure the ending distance between the trend line pairs and set breakout points above and beyond the convergence zone. 🎯 Entry Points - These can be formed on either side of the convergence zone. Adding a small buffer on top of the convergence zone is ideal for setting the entry points of converging patterns. Formula for Entry can be: Long Entry Price = Top + (Top - Bottom) X Entry Ratio Short Entry Price = Bottom - (Top-Bottom) X Entry Ratio Whereas Top refers to the upper side of the convergence zone and bottom refers to the lower side of the convergence zone. Entry Ratio is the buffer ratio to apply on top of the convergence zone to get entry points. 🎯 Stop Price - Long entry can act as stop for short orders and the short entry can act as stop price for long orders. However, this is not mandatory and different logic for stops can be applied for both sides. Formula for Stop Can be Long Stop Price = Bottom - (Top - Bottom) X Stop Ratio Short Stop Price = Top + (Top - Bottom) X Stop Ratio 🎯 Target Price - It is always good to set targets based on desired risk reward ratio. That means, the target should always depend on the distance between entry and stop price. The general formula for Target can be: Target Price = Entry + (Entry-Stop) X Risk Reward 🎯 Invalidation Price - Invalidation price is a level where the trade direction for a particular pattern needs to be ignored or invalidated. This price need to be beyond stop price. In general, trade is closed when a pattern hits invalidation price. Formula for Invalidation price is the same as that of Stop Price, but Invalidation Ratio is more than that of Stop Ratio Long Invalidation Price = Bottom - (Top - Bottom) X Invalidation Ratio Short Invalidation Price = Top + (Top - Bottom) X Invalidation Ratio 🟡 Back Test and Forward Test and Measure the Profit Factor It is important to perform sufficient testing to understand the profitability of the strategy before using them on the live trades. Use multiple timeframes and symbols to perform a series of back tests and forward tests, and collect as much data as possible on the historical outcomes of the strategy. Profit Factor of the strategy can be calculated by using a simple formula Profit Factor = (Wins/Losses) X Risk Reward 🟡 Use Filters and Different Combinations Filters will help us in filtering out noise and trade only the selective patterns. The filters can include a simple logic such as trade long only if price is above 200 SMA and trade short only if price is below 200 SMA. Or it can be as complex as looking into the divergence signals or other complex variables.

Education

Learn Ascending, Decending and Symmetrical Triangles | Powerful Hey traders, In this post, we will discuss 3 simple and profitable types of a triangle pattern. 1️⃣ The first type of triangle is called a descending triangle. It is a reversal price action pattern that quite accurately indicates the exhaustion of a bullish trend. Setting a new higher high the market retraces and sets a higher low, then bulls start pushing again but are not able to retest a current high and instead the price sets a lower high and drops to the level of the last higher low setting an equal low. Multiple lower highs compose a horizontal support that is called a neckline. The price keeps trading in such a manner, setting lower highs and equal lows till the price sets a new lower low. Most of the time, it gives a very accurate signal of a coming bearish move. Please, note that a triangle formation by itself does not give an accurate short signal. The trigger that you should wait for is a formation of a new lower low. Take a look at a descending triangle formation that I spotted on Crude Oil on a 4H time frame. Bearish movement was confirmed after a breakout of the neckline of the pattern. 2️⃣ The second type of triangle is called a symmetrical triangle. It is a classic indecision pattern. It can be formed in a bullish, bearish trend, or sideways market. The price action starts contracting within a narrowing range, setting lower highs and higher lows. Based on them, two trend lines can be drawn. Breakout of one of the trend lines with a quite high probability indicates a future direction of the market. Above is a great example of a symmetrical triangle. Bullish breakout of its upper boundary - a falling trend line was a strong bullish confirmation. 3️⃣ The third type of triangle is called an ascending triangle. It is a reversal price action pattern that quite accurately indicates the exhaustion of a bearish trend. Setting a new lower low, the market retraces and sets a lower high, then bears start pushing again but are not able to retest a current low and instead the price sets a higher low and bounces to the level of the last lower high setting an equal high. A sequence of equal highs compose a strong horizontal resistance that is called a neckline. The price keeps trading in such a manner, setting higher lows and equal highs till the price sets a new higher high. Most of the time, it gives a very accurate signal of a coming bullish move. 📍Please, note that an ascending triangle formation by itself does not give an accurate long signal. The trigger that you should wait for is a formation of a new higher high. Ascending triangle formation helped me to accurately predict a bullish reversal on USDJPY. Its neckline breakout was a strong bullish confirmation. Learn to recognize such triangles and you will see how accurate they are. Let me know what pattern do you want to learn in the next post?

Education

by VasilyTrader

Updated

Algorithmic Identification and Classification of Chart Patterns Welcome to the world of technical analysis, where chart patterns play a pivotal role in shaping trading strategies. This is an ultimate guide designed to help users objectively identify the existence of patterns, define the characteristics and classify them. In this discussion, we will mainly concentrate on the patterns formed by trend line pairs. This includes wedges, triangles and channel type patterns. 🎲 Basic Principle of Identifying the Pattern It is very important to apply definitely set of rules when identifying the patterns in order to avoid biases or fitting patterns to our opinions. The dangers of overfitting the patterns to our bias is documented in the idea To identify the patterns objectively, we need to set some ground rules or follow a well-defined technique to derive the patterns. Here is the technique we follow to identify chart patterns. 🎲 Only Indicator Required - Zigzag Tradingview has plenty of free community scripts for Zigzag indicator. For this demonstration, we are going to use our Multi Timeframe Recursive Zigzag implementation. Once the indicator is loaded on the chart, go to indicator settings and perform these modifications. Disable the Labels : The Labels contain information that is needed for this exercise. Set the Highlight level to 1 or 0 : We can iteratively increase the level and check next levels on the go. You can also adjust Zigzag Length and Depth Parameters. 🎲 Scanning and Identification of valid Pattern We can either use 5 pivots or 6 pivots for pattern identification. 5-Pivot based scanning will generate more patterns than 6-Pivot based scanning. 6 pivot patterns are geometrically more accurate however, there is no proof that 6-Pivot based patterns produce better trading outcome. 🎯 Step 1 - On each level of zigzag, mark the last 5 or 6 zigzag pivots. Since we are using Multi Timeframe Recursive Zigzag implementation, we can gradually increase the zigzag level from 0. This means that on every level, we can check if there are any patterns. On each level - consider only the last 5 or 6 pivots and mark them on the chart. Markings on Level 0 would look like this for 5 and 6 pivot scanning 🎯 Step 2: Draw Trend Lines As part of this step, draw two trend lines. The first trend line will join pivots 1 and 5 marked in the previous step. The second trend line will join pivots 2 and 4 marked in the previous step for 5 pivot scanning. For 6 pivot scanning, the trend line joining pivots 2 and 6 will be marked. 🎯 Step 3: Inspect the validity of trend lines A valid trend line is the one that confirm to below two points Touches all the alternate pivots. For example, the trend line drawn from pivot 1 to 5 should also make contact with the candle of pivot 3. In case of 6 pivot scanning, the trend drawn from pivot 2 to 6 should also make contact with the candle of pivot 4. All the candles from the starting pivot to ending pivot of the zigzag should be confined within the trend line pairs. Meaning, no candles should completely go above the upper trend line and no candle should completely go below the lower trend line. Please note that while verifying the above points, minor adjustments in the alignment of the trend line can be made. Start and end of the trend line does not need to be on the high/low points of the candle, it can also be placed in any of the wick positions. After adjusting the trend lines, in both type of scanning, we can see that the trend lines confirm to the above-mentioned rules. Hence, we have arrived with valid patterns in both types of scanning on the level 0 zigzag. 🎲 Classification of Patterns Once the patterns are identified, they need to be classified into different types. We need to apply predetermined rules to objectively classify patterns into what they are. Everyone can build their own rules. 🎯 Properties of Derived Trend Lines Before classifying the trend lines, we need to understand below properties of the derived trend lines. ▶ Direction of Individual Trend Lines Both the trend lines needs to be individually classified among these categories Rising - Trend Line is sharply rising up. Falling - Trend Line is sharply falling down. Flat - Trend Line is flat across the pivots. Bi-Directional - Trend Lines are moving in opposite directions Please note that, it is less probable for trend line to absolutely flat. Hence, allow angle to have certain degree of threshold to be considered as flat. For example, +- 10 degrees can be considered as flat. Also, the angle of the trend line can further subjective based on how compressed the chart is. It is recommended to use either log/auto-scale or a specific formula based on ATR to identify the angle. ▶ Characteristic of the Trend Line Pairs This parameter defines how both trend lines are aligned with respect to each other. Possible options are: Converging - Trend Lines are converging and when extended towards the right will intersect at a visible distance. Diverging - Trend Lines are diverging from each other and when extended towards the left will intersect at a visible distance. Parallel - Trend Lines are almost parallel to each other and may not intersect to either right or to left at a visible distance. To objectively identify the intersection distance, we further need to use some standard. Here are few options Fixed Number of Bars : If the trend lines do not intersect to either left or right within X bars (Lets say 100), they can be considered as parallel. Otherwise, they can be classified as converging or diverging based on which side the intersection happens. Relative to the Length of Pattern : If the length of longest trend line is X bars. The trend lines should converge within 1–2 times the X bars to be considered as converging or diverging. Or else, it can be termed as parallel channels. 🎯 Geometrical Shapes Classification Following are the main geometrical classifications based on the characteristics of the trend lines and the pair. Channels - Trend Lines are parallel to each other. And hence they both move in the same directions. Wedges - Trend Lines are either converging or diverging from each other. However, both trend lines move in the same direction. Both trend lines will be either up or down. Triangles - Trend Lines are either converging or diverging from each other. But, unlike wedges, upper and lower trend lines will have different direction. 🎲 Types of Patterns Once we identify the direction and characteristics of trend lines, we can go on and classify the pattern in following categories. Details below. Please note that examples are generated programmatically. 🎯 Rising Wedge (Contracting) Rules for Contracting Rising Wedge are as follows: Both Trend Lines are Rising Trend Lines are converging. 🎯 Rising Wedge (Expanding) Rules for the Expanding Rising Wedge are as follows: Both Trend Lines are rising Trend Lines are diverging. 🎯 Falling Wedge (Contracting) Rules for the Contracting Falling Wedge are as follows: Both Trend Lines are falling Trend Lines are contracting. 🎯 Falling Wedge (Expanding) Rules for the Expanding Falling Wedge are as follows: Both Trend Lines are falling Trend Lines are diverging. 🎯 Contracting/Converging Triangle Rules for the Contracting Triangle are as follows The upper trend line is falling The lower trend line is rising Naturally, the trend lines are converging. 🎯 Rising Triangle (Contracting) The rules for the Contracting Rising Triangle are as follows The upper trend line is flat The lower trend line is rising Naturally, the trend lines are converging towards each other 🎯 Falling Triangle (Contracting) The rules for the Contracting Falling Triangle are as follows The upper trend line is falling The lower trend line is flat Naturally, the trend lines are converging towards each other 🎯 Expanding/Diverging Triangle Rules for the Expanding Triangle are as follows The upper trend line is rising The lower trend line is falling Naturally, the trend lines are diverging from each other. 🎯 Rising Triangle (Expanding) The rules for the Expanding Rising Triangle are as follows The upper trend line is rising The lower trend line is flat Naturally, the trend lines are diverging from each other 🎯 Falling Triangle (Expanding) The rules for the Expanding Falling Triangle are as follows The upper trend line is flat The lower trend line is falling Naturally, the trend lines are diverging from each other 🎯 Rising/Uptrend Channel Rules for the Uptrend Channel are as follows Both trend lines are rising Trend lines are parallel to each other 🎯 Falling/Downtrend Channel Rules for the Downtrend Channel are as follows Both trend lines are falling Trend lines are parallel to each other 🎯 Ranging Channel Rules for the Ranging Channel are as follows: Both trend lines are flat Naturally, the trend lines are parallel to each other.

Education

Updated

CHARTIST TRIANGLES: HOW DOES IT WORK? ANSWER is HERE!ASCENDING TRIANGLE: Identify the levels where the price has often closed and opened (black line). The price is making higher and higher lows. Draw a bullish diagonal. Take Profit is calculated by plotting the lowest increase on the black line (see graph). Report this segment to the BREAK of the black line, but ESPECIALLY to the CLOSING of the candle in its time unit!!! ___________________________________________________ DESCENDING TRIANGLE: Identify the levels where the price has often closed and opened (black line). The price makes higher and lower highs. Draw a bullish diagonal. Take Profit is calculated by plotting the highest drop on the black line (see graph). Report this segment to the BREAK of the black line, but ESPECIALLY to the CLOSING of the candle in its time unit!!! ___________________________________________________ SYMMETRICAL TRIANGLE: The triangle of indecision, just like the RANGE!! The price is tightening, and we don't know in which direction it's going PETER!!?? Draw a bullish and bearish diagonal. Wait for a break in one of the diagonals. The Take Profit is calculated by reporting the highest side of the rectangle which made a PULLBACK (see my old publication on "PULLBACK") and see graph below. Report this segment to the BREAK of one of the diagonals, but ESPECIALLY to the CLOSING of the candle in its time unit!!! STOP Loss below the previous low if you are BUYING. STOP Loss above the previous high if you are SHORT (Seller).

Education

08:01

by Le-Loup-de-Zurich

What do you do when your trading plan fails? Yesterday I wrote about a beautiful chart pattern that was forming on the Bitcoin daily time frame that ended up failing not long after I wrote the post. That kind of thing will shake a trader to their core, especially if they thought it was going to play out, but ended up losing their shirt. This is why it is important to set stop losses, so that if the trade does go the other way, you will be out of the trade before it gets too bad. This is simply called risk management, and is one of the biggest things that any trader, especially new traders need to master. Trading is a business of statistics and probabilities. Just because something has worked for you in the past, doesn't mean it is going to work for you every time. So when something like a bullish pattern that you have traded many times fails, you have to reassess and move on to the next trade. Out of 100 trades, that pattern may only work 6 or 7 times which gives you a 60-70% chance of it working in your favor. That's how it works, nothing is ever 100% in this game. So you always have to be ready for things to not work out the way you think they should. If they don't work out, don't freak out! Just learn from your mistakes, readjust your plan, and move along to the next trade! Hopefully things like this will help you better understand the importance of a good risk management plan. Be safe out there everyone and trade logically!

Education

by thelogicaldude

4 Triangle Types You Need to Know Triangle chart patterns offer valuable insights into market dynamics, symbolizing a clash between buyers and sellers within a contracting price range. These patterns are often classified as continuation or neutral patterns, suggesting that the price is likely to persist in its existing trend after the pattern concludes. 1. Symmetrical Triangle: A symmetrical triangle manifests when the slope of the price's highs and lows converges, creating a triangular structure. This pattern signifies a period of consolidation, with lower highs and higher lows indicating equilibrium between buyers and sellers. As the slopes converge, a breakout becomes imminent, though the breakout direction remains uncertain. To capitalize on a symmetrical triangle , consider placing entry orders above the slope of the lower highs and below the slope of the higher lows, prepared to ride the price in the direction of the breakout. 2. Ascending Triangle: An ascending triangle features a resistance level and a slope of higher lows. Buyers gradually push the price up, testing the resistance level. This pattern often signals an upward breakout as buyers gain strength and attempt to breach the resistance. To trade an ascending triangle , set entry orders above the resistance line and below the slope of the higher lows, anticipating a potential upward breakout. However, remain open to movement in either direction, as the resistance level may prove formidable. 3. Descending Triangle: In contrast to the ascending triangle , a descending triangle comprises lower highs forming the upper line, with a robust support level acting as the lower line. Sellers gain ground against buyers, and in most cases, the support line eventually breaks, leading to a continued downward move. To trade a descending triangle , set entry orders above the upper line (lower highs) and below the support line, prepared for a potential breakout. Note that sometimes, the support line may hold, resulting in a robust upward move. 4. Broadening Triangle: Now, let's delve into the captivating Broadening Triangle , also known as a Megaphone Pattern. This pattern stands out due to its expanding price range, creating a distinctive visual pattern on the chart. The Megaphone Pattern comprises a series of higher highs and lower lows, causing the price range to widen over time. This pattern reflects increasing volatility and uncertainty in the market, with both buyers and sellers actively participating. Trading Triangles demands meticulous analysis and risk management due to their nature and potential for unpredictable price moves. To approach Triangle patterns effectively: 1️⃣ Pay attention to the pattern's boundaries: Identify the upper trendline connecting the highs and the lower trendline connecting the lows. These trendlines define the range of price movement within the pattern. 2️⃣ Watch for breakouts and reversals: Triangles often precede significant price movements. Look for breakouts above the upper trendline or breakdowns below the lower trendline as potential trading opportunities. 3️⃣ Confirm with additional indicators: Combine your analysis with other technical indicators or tools to validate your trading decisions. Consider using indicators like moving averages, oscillators, or volume analysis to confirm the pattern's potential direction. Remember, trading Triangles necessitates careful analysis and risk management. Consider the overall market context, fundamental factors, and other technical signals to make informed trading decisions. While chart patterns provide valuable insights, they cannot guarantee future price movements. Always conduct thorough research, stay updated with market news, and adapt your strategy as market conditions evolve. Wishing you successful trading journeys guided by these patterns! 🚀📈✨ 💬 We would love to hear your thoughts and feedback on the article! Please leave your comments and questions below the article. Your input is valuable to us!

Education

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Select market data provided by ICE Data services. Select reference data provided by FactSet. Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView, Inc.

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