This article has been translated from English to Gen Z Slang.
A triangle chart pattern is when the money's moving in tighter loops over time, basically showing an epic showdown between bulls and bears, ya know, like the ultimate market drama.
Triangle patterns are like the "let's keep it going" vibe, meaning once they wrap up, peeps expect the price to keep vibin' with the same trend it was on before the pattern showed up.
We consider a triangle pattern lit when it hits at least five points of support and resistance.
Think three hits on the support line and two on the resistance. Or flip it, whatever works.
Just like the three little pigs, we got three triangle chart formations: symmetrical triangle, ascending triangle, and descending triangle.
Symmetrical Triangle
A symmetrical triangle is when the price's highs and lows are like, “Hey, wanna hang out and form a triangle?”
During this party, the market is making lower highs and higher lows.It’s like neither buyers nor sellers can push the price enough to make a trend. It's a stalemate.
If this was a buyer vs. seller showdown, it'd be a draw, for sure.
This is also where the market hits the “chill mode.”
In the chart above, you can see neither buyers nor sellers can flex enough to push the price. That's when you get lower highs and higher lows, fam.
We dunno which way it’s gonna break, but we know it’s gonna go somewhere wild. Eventually, one squad’s gonna tap out.
So how do we cash in on this?
Easy peasy.
We can slap entry orders above the lower highs and below the higher lows of the symmetrical triangle.
Since we’re like fortune tellers knowing a price breakout’s coming, we can just ride along with wherever the market decides to boogie.
In this example, if we dropped an entry order above the lower highs, we’d be surfing that uptrend wave.
If you tossed another order below the higher lows, then you’d cancel it like it’s yesterday’s news when the first order hits.
Ascending Triangle
An ascending triangle is when there's a resistance level plus a slope of higher lows, like buyers are leveling up.
During this jam, buyers can't quite break that resistance ceiling, but they’re slowly lifting the price with those higher lows vibes.
In the chart above, you see buyers leveling up 'cause they’re making higher lows. They keep adding pressure on that resistance level, setting up for a breakout.
The Q is, “Which way will it pop? Buyers gonna bust that ceiling or is resistance too beefy?”Loads of chart books say buyers usually win, and prices break past resistance.
But, in our experience, that ain’t always the 411.
Sometimes, the resistance level's too tough, and buyers can't push through.
Most of the time, price does go up, but don’t get caught up in direction. Just be ready to flex with whatever move happens.
We’d drop an entry order above the resistance line and below the higher lows’ slope.
Here, buyers lost and the price took a nosedive! The drop matched the height of the triangle formation.
If we set that short order below the triangle’s bottom, we’d snatch some pips off that drop.
Descending Triangle
As you probs guessed, descending triangles are the flip side of ascending triangles (calling it, you’re a genius!).
In descending triangle chart patterns, there's a spree of lower highs forming the upper line, while the lower line's chillin’ as a support level the price can't break.
In the chart above, the price is vibing with lower highs, hinting sellers are gaining clout against buyers.
Most of the time, price will eventually break the support line and keep falling.But sometimes, support's strong AF, and the price might bounce back up with a vengeance.
The cool part is, we don’t care where it goes, we just know it’s gonna move.
We’d place entry orders above the upper line (those lower highs) and below the support line.
Here, the price busted above the top of the triangle pattern.
After the breakout, it shot up higher, covering about the same height as the triangle. Going for that entry above and aiming as high as the triangle formation would’ve scored some sweet gains.