Triangle pattern
Family VI · Charts & indicators
Not to be confused with candlestick pattern, chart pattern, engulfing candlestick pattern.
Triangle pattern is a chart formation that develops when price action is contained between two trendlines that converge, creating a narrowing range. It is classified as a continuation pattern in technical analysis, though it can also mark reversals. The pattern resolves when price closes decisively outside one of the trendlines.
Types and Structure
Triangle patterns are categorised by the slope of the two boundary lines:
- Ascending triangle: a horizontal upper line and a rising lower line, typically considered a bullish continuation pattern.
- Descending triangle: a falling upper line and a horizontal lower line, often seen as bearish.
- Symmetrical triangle: both lines slope toward each other at similar angles, indicating indecision that resolves in either direction.
Each type requires at least two touches on each trendline to be valid. The pattern is confirmed only when price closes beyond the boundary, preferably with increased volume.
Worked Example
Consider a symmetrical triangle on a daily chart. The upper trendline connects swing highs at 105 and 103, while the lower trendline connects swing lows at 95 and 97. The apex is where the lines intersect, projected at 100.
The measured move is calculated by adding the height of the triangle at its widest point to the breakout level. In this case, the target is 113.
Trading Considerations
Triangle patterns can produce false breakouts, especially in low-volume conditions. Traders often wait for a close beyond the trendline and a retest before acting. The pattern's reliability varies by market and timeframe; no universal success rate applies. Stop-loss placement typically goes below the opposite trendline or the last swing point inside the triangle.
Often confused with
- candlestick pattern
- A candlestick pattern is a short-term formation of one or a few candles, whereas a triangle pattern spans many bars and forms two converging trendlines; the visible sign is the number of candles involved.
- chart pattern
- A chart pattern is any recurring price formation, while a triangle pattern is a specific type defined by converging trendlines; the visible sign is the presence of two boundary lines that meet at an apex.
- engulfing candlestick pattern
- An engulfing candlestick pattern is a two-candle reversal signal, not a multi-bar consolidation with trendlines; the visible sign is a single candle body completely covering the previous one.
See also
- forex technical analysis indicators
- price action
- fundamental analysis
- support and resistance
- technical analysis
- fibonacci