Ascending Triangle

An ascending triangle is a bullish chart pattern which is formed by a horizontal line (acting as price resistance) and an upward sloping diagonal trend line (acting as price support). Both lines head towards a point of converge, with the lows of the candlesticks progressively getting higher until the price of the asset breaks out above the upper trend line.

The reason for the formation of the ascending triangle is that sellers of the currency asset gradually exit their positions, which force the prices that form the support/downside barrier to push higher in a gradual fashion until a time comes when buyers completely take over the market, causing the asset price to experience an upside breakout through the horizontal resistance.

In order for the boundaries of the ascending triangle to be deemed as valid trend lines, they must touch at least two areas where candles form highs and lows.

Ascending Triangle

In trading the ascending triangle, traders can take advantage of the upside breakout by using a Buy Stop order placed a few pips above the horizontal resistance.