Ascending wedge bullish or bearish4/24/2024 ![]() Naturally, the stop loss goes above the flat resistance line. One advantage of this type of continuation play is that you’ve got to use a very tight stop loss. See an example below: Ascending triangle pattern 1 To act as a continuation pattern within a downtrend, the upward-sloping trendline of the ascending triangle must be broken.Ī short trade is triggered once we break below the upward-sloping trendline. So, in a downtrend, the resistance level has a bigger chance to hold while the support level gets broken. The top of the ascending triangle pattern can hold because the prevailing trend is downward. The ascending triangle also can play out as a continuation pattern. ![]() In this case, we apply the same trading rules (entry and exit) as we would with the ascending triangle pattern within an uptrend. 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 can expect a change in the trend, from bearish to bullish. If the flat resistance line is broken, the ascending triangle pattern can signal an upcoming trend reversal. Or, it can signal an imminent market reversal.So far we have seen how to trade ascending triangle within an uptrend but when the ascending triangle pattern develops within a downtrend we have two possible trade scenarios: See below: Ascending Triangle Pattern in Downtrend Let’s see a short study of when the ascending triangle happens during a bearish trend. Those instances usually happen when the ascending triangle develops within a downtrend. However, there are some instances where the ascending triangle can act as a bearish pattern. Normally, the ascending triangle is a bullish pattern because it’s most common to appear within an uptrend. Well, the short answer is bullish however, the long answer is that it can be both. “Is ascending triangle bullish or bearish?” If you try to buy every swing high you can get stuck in a whipsaw when you’re trading this pattern. Only then start buying on the next candle opening. What you need to do is to wait for the triangle pattern to break out and close above our resistance line. Other times, the pattern will develop spiky bars that will lead to false breakouts. Often you’ll see the ascending wedge pattern which will break the resistance line but have no real momentum behind the breakout. ![]() The first little trick that we’ve learned is that on a price chart, the triangle pattern will rarely have a perfect shape. Now that we’ve learned how the ascending formation looks, we want to share with you two things that we have learned from trading the bullish triangle.
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