We will treat the symmetrical triangle as a slightly different kind, while the ascending and descending triangles are the exact same thing only in the reversed direction.
The symmetrical triangle most of the time forms following a sharp move during a trend and is an indication of a correction taking place. The direction of breakout is most often in the direction of the preceding trend and usually, it’s just a matter of when this breakout will occur. In this regard, the symmetrical triangle can be thought of as similar to the flag pattern, only with a different formation on the chart.
It forms when a rising support trendline and a falling resistance trendline converge into one another, hence price action gets squeezed into a tighter and tighter space awaiting a breakout.
As with most corrective patterns, price action inside of the symmetrical triangle tends to be choppy and highly unpredictable.
Initial stop placement:
A chart formation where the resistance trendline is horizontally flat and the support trendline is ascending and converging into the flat resistance trendline, thus the name “ascending triangle”.
It can be a sign of continuation in an uptrend, but it’s very unlikely to form as a consolidation during a downtrend. In fact, in a downtrend, it will more likely signal the onset of a reversal and the start of a new bull trend.
Statistically, most of the time price breaks out of ascending triangles to the upside, though as anything in trading it’s not a definite rule and protective measures like stop loss orders should always be taken.
Initial stop-loss placement:
This chart pattern is formed by a resistance trendline which is descending (falling) and a support trendline which is horizontally flat. The name descending triangle comes from the descending price action that creates the triangle.
The price will most of the times break a descending triangle to the downside. This is mainly due to the selling pressure that tries to penetrate the horizontal support several times until it’s finally stronger and cracks it.
However, as we’ve said other times that is not always the case and descending triangles can be just as easily broken to the upside.
Initial stop placement:
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