What it looks like
At least two highs at about the same level form a flat ceiling. Below it, each pullback stops higher than the last, so a rising line can be drawn through the lows. The range narrows towards the ceiling. The pattern completes on a close above the ceiling. The height is measured at the widest part, from the ceiling down to the first low.
What it means
Buyers kept paying more on every dip while one level held price back. Each higher low shows buyers getting more eager, and the sellers at the ceiling are being worn down. When price closes above the ceiling, that supply has gone and buyers are free to push on.
How to trade it
- 1
Draw the flat ceiling and the rising line of lows.
- 2
Confirmation: a candle closes above the ceiling.
- 3
Entry: buy at that close.
- 4
Stop: below the last swing low inside the triangle. Example on gold: ceiling at 4,050, lows at 4,020, 4,032 and 4,041, close above at 4,053. Buy at 4,053, stop at 4,039, a 14 point risk.
- 5
Target: the widest height (30 points) from the break, about 4,080.
A close back inside the triangle.
Where it works best
In an uptrend on 15 minute to daily charts, where the triangle is a rest before the next leg up.
WickSpeak finds ascending triangle breakouts automatically and names them on the candles that made them. The note explains what it is, how to trade it and that a close back inside the triangle proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Buying before the ceiling breaks, on the assumption that it will.
- Drawing the ceiling through highs that are not really level.
- Using the narrow end for the target instead of the widest part.
Related patterns
Questions traders ask
Is an ascending triangle bullish?
It usually is, because buyers are paying more on each dip. It is only confirmed by a close above the ceiling, and some do break down instead.
How do you measure the target?
Take the height of the triangle at its widest point, from the ceiling to the first low, and add it to the breakout level.
Where should the stop go?
Below the last swing low inside the triangle. A close back inside the triangle already proves the break wrong.
What if it breaks down instead?
Then the bullish case has failed. A close below the rising line of lows is a different signal and should be judged on its own.