Here, an ascending triangle pattern is formed during the downtrend and prices remain low after the breakout. When the breakout occurred, the profit target was achieved. A short entry or cell signal occurred when the price fell below the low trend line. Stop loss can be placed just above the upper trend line.
Such a broad pattern offers higher risk / reward than a pattern that narrows significantly over time. The narrower the pattern, the shorter the distance to the breakout point, and the smaller the stop loss, but the profit target is still largely based on the pattern.
Both of these two types of triangles are continuation patterns, except that they look different. The descending triangle has a horizontal lower line and the upper trend line is descending. This is the opposite of an ascending triangle with an ascending lower trend line and a horizontal upper trend line.
The biggest problem with triangles, and common chart patterns, is the possibility of false breakouts. One price may deviate from the pattern and return to the pattern, or the price may break out to the other side. If the price crosses the trend line but doesn’t gain momentum in the breakout direction, you’ll need to redraw the pattern several times.
The upward triangle provides a profit goal, which is just an estimate. Prices may far exceed that target or may not reach the target.
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