Triangle Pattern
A chart pattern formed by converging trendlines as price consolidates into a narrowing range, typically preceding a breakout in one direction once the range tightens enough.
A triangle pattern forms when price consolidates into a progressively narrowing range, bounded by two converging trendlines connecting a series of lower highs and higher lows. A symmetrical triangle has both trendlines converging toward each other at a similar angle, generally considered directionally neutral until a breakout occurs; an ascending triangle has a flat upper trendline with a rising lower trendline, generally considered a bullish continuation pattern; and a descending triangle has a flat lower trendline with a falling upper trendline, generally considered a bearish continuation pattern.
As the range narrows, trading volume typically contracts, often expanding sharply once price finally breaks out (see Kaavon's "Breakout (and Breakdown)" glossary definition) of the triangle in one direction — the breakout's direction, rather than the triangle's shape alone, is generally treated as the more reliable signal of where price is actually headed next, since a triangle pattern can break in either direction regardless of its specific classification.
Examples
- An ascending triangle, with a flat upper trendline and a rising lower trendline, is generally considered a bullish continuation pattern within an existing uptrend.
- Trading volume typically contracts as a triangle pattern's range narrows, often expanding sharply once price finally breaks out in one direction.