The ascending triangle is a bullish continuation pattern. This pattern is made by two converging lines. The first line is an upward slant which is the support and the other is a horizontal resistance line. To validate the ascending triangle, there has to be an oscillation between the two lines. Each line has to be touched at least twice for validation.
Here is an ascending triangle chart:
The target price of the ascending triangle is decided by its height from the base of the triangle that is carried over the break point. A similar technique is to draw a parallel to the support line of the ascending triangle from the first contact point with the resistance.
Several statistics about the ascending triangle are:
– In 62% of cases, there is a bullish breakout.
– In 75% of cases, the target price will be reached.
– In 60% of cases, a pullback occurs on the resistance.
– In 25% of cases, there can be false breakouts.
The exit often occurs at 2/3 of the pattern; this is the output level that offers the best performance.
The target price of the pattern is normally reached prior to the end of the triangle.
Any false breaks give no indication on the true side of the exit.
Try to avoid taking a position if the breakout occurs before the 2/3 of the pattern.
Pullbacks are harmful for the performance of the pattern.