What happens if the ascending triangle pattern develops within a downtrend?

Unlike in an uptrend, when the ascending triangle pattern develops within a downtrend it’s more likely to signal a reversal than a continuation. In this case, we apply the same trading rules (entry and exit) as we would with the ascending triangle pattern within an uptrend.

What are ascending triangles & troughs?

Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation. Because of its shape, the pattern can also be referred to as a right-angle triangle. Two or more equal highs form a horizontal line at the top. Two or more rising troughs form an ascending trend line that converges on the horizontal line as it rises.

What is ascending triangle trading strategy?

The ascending triangle trading strategy is an easy method to capture breakouts inside a trend. To confirm the breakout, we’re going to use the RSI tool which is a momentum-based indicator. Since the price usually contracts inside the ascending triangle pattern, at one point either the bulls or the bears must win.

What is descending triangle reversal pattern?

If the price action breaks to the upside from the descending triangle reversal pattern at the bottom, a trader can choose long positions. Both the ascending and descending triangle are continuation patterns. The descending triangle has a horizontal lower trend line and a descending upper trend line.