When the trend lines are ascending and the trading volume declines, it signifies a rising wedge, which serves as a bearish signal. Converging trend lines coupled with declining trading volume provide a reliable signal of an impending trend reversal. Another noteworthy aspect is that both trend lines are either rising or falling.

In a wedge, the trend lines do not intersect, and the price breaks out or down before the lines intersect. Rising WedgeĪlthough wedge patterns may resemble triangle patterns, there are critical distinctions to note. With an escalation in trading volume, the trend lines intersect, resulting in a price breakdown. The bearish symmetrical triangle materializes within a downtrend, signifying market indecision as highs diminish while lows increase. This occurs due to the gradual decrease in highs and the gradual increase in lows.Īs trading volume rises, the lines intersect, leading to a price breakout and the attainment of new highs.

A bullish symmetrical triangle emerges during an uptrend, comprising two converging trend lines progressing at the same pace. Symmetrical triangles typically indicate a trend continuation. The support line transitions into a resistance line. At a certain point, the upper trend line intersects the support line, leading to a price breakdown and the initiation of a bear market phase. Within this setup, the lower trend line (or support line) remains horizontal, while the highs steadily decline, forming a diagonal downward line. Descending TriangleĬonversely, this pattern occurs in an uptrend and predicts a reversal to a bear market. Subsequently, the bulls begin purchasing at prices above the resistance line, which eventually transforms into a new support line as the uptrend unfolds. This configuration signifies an increase in buyer demand. This pattern entails a horizontal resistance level, indicating consistently equal and steadfast highs, coupled with a steadily rising support level, reflecting progressively higher lows. Ascending TriangleĪn ascending triangle represents a bullish reversal pattern observed in a downtrend, signaling an imminent breakthrough of the upper trend line. All triangle patterns are further classified as ascending, descending, or symmetrical. These triangles occur when two trend lines converge, marking the cessation of the existing market trend and the onset of a phase of indecision or a new trend opposite to the prior one.Įven if a triangle pattern you identify is deemed a continuation pattern, it’s prudent to verify for breakouts before deciding when to enter or exit your position. Triangle chart patterns are a cluster of candlestick patterns bearing a shape resembling a triangle. Keep this big book of chart patterns handy it will always assist you in your trading endeavors. Our comprehensive guide to trading chart patterns covers both bullish and bearish patterns, conveniently categorized as triangle chart patterns, rectangle chart patterns, pole chart patterns, and exotic chart patterns. This article presents a vital selection of the most crucial chart patterns. For years, we’ve been introducing traders to candlestick patterns that aid in identifying upcoming market events, such as trend reversals, continuations, or consolidations.

Bear flag inside a falling wedge