The ascending triangle is one of the most reliable bullish chart patterns in technical analysis. It forms when buyers become increasingly aggressive while sellers hold a fixed resistance level. Eventually, the buying pressure overwhelms the sellers and price breaks out. In this guide, you will learn everything you need to know to trade this pattern successfully.
What is an Ascending Triangle?
An ascending triangle is a bullish continuation pattern that forms when price makes higher lows while repeatedly testing a horizontal resistance level. The pattern gets its name from the rising trendline connecting the higher lows, which creates the ascending lower boundary of the triangle.
Key identification: Look for at least two touches on the flat resistance line and at least two higher lows on the rising support line. The more touches on each line, the more significant the pattern.
How to Identify an Ascending Triangle
To confirm you are looking at a valid ascending triangle, check for these elements:
- Flat resistance: A horizontal line where price repeatedly fails to break higher
- Rising support: A series of higher lows showing increasing buyer aggression
- Converging lines: The two lines should meet at a point (the apex)
- Prior uptrend: Typically forms during an existing uptrend as a continuation
- Volume pattern: Volume often decreases as the pattern develops
Ascending Triangle Example
Stock XYZ is in an uptrend and hits resistance at $50. It pulls back to $45, bounces back to $50, pulls back to $46, bounces to $50, pulls back to $47, and bounces to $50 again. Each pullback is shallower than the last, forming higher lows at $45, $46, and $47 while resistance stays flat at $50. This is an ascending triangle.
Why the Ascending Triangle Works
Understanding the psychology behind this pattern helps you trade it with confidence:
- Sellers are consistent: They keep selling at the same resistance level
- Buyers are getting aggressive: Each time they buy earlier, creating higher lows
- Supply is absorbed: Sellers at resistance are running out of shares to sell
- Breakout is inevitable: Eventually, buyers overwhelm the remaining sellers
Trading the Ascending Triangle
Entry Strategies
There are two main approaches to entering ascending triangle trades:
1. Breakout Entry
- Wait for price to close above the flat resistance line
- Enter on the breakout candle close or the next candle open
- Look for volume confirmation (volume spike on breakout)
2. Anticipation Entry
- Enter near the rising support line before the breakout
- Tighter stop loss but riskier if pattern fails
- Better risk-reward ratio if the breakout occurs
Entry Example
With resistance at $50 and the rising support currently at $48, a breakout trader waits for a close above $50 to enter. An anticipation trader might enter at $48 with a stop below the trendline, aiming for the breakout to $50 and beyond.
Stop Loss Placement
- For breakout entry: Place stop below the most recent higher low
- Alternative: Place stop below the rising trendline
- Tight stop: Just below the breakout candle low (higher risk)
Profit Targets
The measured move technique gives you a reliable price target:
- Measure the height of the triangle at its widest point
- Add that distance to the breakout level
- This gives you the minimum expected move
Target calculation: If the triangle is $5 wide (from $45 low to $50 resistance) and price breaks out at $50, your minimum target is $55 ($50 + $5).
Volume Analysis
Volume provides crucial confirmation for ascending triangle trades:
- During formation: Volume typically decreases as the pattern develops
- At breakout: Volume should spike significantly on the breakout
- Low volume breakout: Be cautious - these are more likely to fail
Common Mistakes to Avoid
- Trading before breakout: The pattern can fail and break down instead
- Ignoring volume: Low volume breakouts often lead to fakeouts
- Wrong context: Pattern is less reliable in downtrends
- Chasing extended breakouts: Enter on breakout, not after a big move
- No stop loss: Always protect yourself in case the pattern fails
Ascending Triangle Failures
Not all ascending triangles break out bullishly. Here is what to watch for:
- Breakdown: If price breaks below the rising trendline, the pattern fails
- Fakeout: Price briefly breaks resistance then falls back inside
- Time decay: Patterns that take too long to break out lose their power
If the pattern fails, exit your position and wait for a new setup.
Real-World Tips
- Use alerts: Set price alerts at the resistance level so you do not miss the breakout
- Check the market: Ascending triangles work better when the overall market is bullish
- Multiple timeframes: Confirm the pattern on higher timeframes for bigger moves
- Patience pays: Wait for clean breakouts with volume confirmation
Track Your Triangle Pattern Trades
Pro Trader Dashboard helps you log and analyze your chart pattern trades. See your success rate with ascending triangles and improve your pattern recognition.
Summary
The ascending triangle is a powerful bullish pattern that forms when buyers push price into higher lows while sellers defend a flat resistance level. Trade the breakout above resistance with volume confirmation, set your stop below the rising trendline, and target the measured move distance. With proper execution, ascending triangles can be a reliable source of profitable trades.
Want to learn about other triangle patterns? Check out our guides on the descending triangle and symmetrical triangle.