Subscribe to RSS feeds Bulkowski Blog via RSS

Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.

Bulkowski's Ascending Triangles

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 12/02/2016
19,192 68.35 0.4%
9,037 55.55 0.6%
627 -6.01 -0.9%
5,251 -72.57 -1.4%
2,192 0.87 0.0%
YTD
10.1%
20.4%
8.5%
4.9%
7.2%
Tom's Targets    Overview: 11/30/2016
18,700 or 19,300 by 12/15/2016
8,650 or 9,200 by 12/15/2016
650 or 605 by 12/15/2016
5,130 or 5,400 by 12/15/2016
2,150 or 2,300 by 12/15/2016

Written by and copyright © 2005-2016 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

On pages 711 to 729 of the book Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., you can read the complete treatment of ascending triangles, including identification guidelines, focus on failures, statistics, trading tactics, and a sample trade.

If you click on this link and then buy the book (or anything) at Amazon.com, the referral will help support this site. Thanks. -- Tom Bulkowski

$ $ $

 

Shown is an ascending triangle chart pattern

Ascending Triangle

Ascending Triangle Overview

The ascending triangle is a mediocre performer despite its reputation as a reliable chart pattern. In fact, the ascending triangle performs best when the breakout is downward, especially in a bear market.

Click ascending triangle to read about the Elliott wave version.

Important Bull Market Results for Ascending Triangles

Overall performance rank for up/down breakouts (1 is best): 17 out of 23; 9 out of 21
Break even failure rate for up/down breakouts: 13%; 11%
Average rise/decline: 35%; 19%
Throwback/pullback rate: 57%; 49%
Percentage meeting price target for up/down breakouts: 75%; 68%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Ascending Triangle Identification Guidelines

CharacteristicDiscussion
Price trendCan be any direction leading to the chart pattern.
ShapeTriangular. Prices move between two converging trendlines.
TrendlinesTwo trendlines bound prices; the top trendline is horizontal and the bottom one slopes upward.
CrossingPrice must cross the pattern from side to side, filling the triangle with price movement, not white space.
TouchesPrice must touch each trendline at least twice, forming distinct valleys and peaks.
VolumeTrends downward 77% of the time.
BreakoutUpward 70% of the time and 61% of the way to the triangle apex (upward breakouts) and 62% of the way for downward breakouts.
Top of page   More

Ascending Triangle Trading Tips

Consult the figure on the right.

Trading TacticExplanation
Measure ruleCompute the height from the price of the horizontal trendline (B) to the lowest valley in the pattern (A) and then multiply it by the above “ percentage meeting price target.” Add it (upward breakouts) or subtract it (downward breakouts) from the breakout price. The breakout price is the point at which price pierces the trendline. The associated link provides more information.
StopPlace a stop loss order on the side opposite the breakout unless that would be too far away. Click the link on the left for stop placement information. For example, if the breakout is upward, a stop at any of the minor lows on side A would work well. For downward breakouts, use the price of B as the stop price.
RisePatterns with a long-term rise (over 6 months) leading to the triangle show price rising an average of 37% after an upward breakout. Those with a short-term decline (less than 3 months) leading to the triangle show a 41% average rise after an upward breakout.
Throwback and PullbacksThrowbacks and pullbacks hurt post breakout performance. The links on the left define terms. For performance information on throwbacks and pullbacks, click the associated link.
Ascending triangle measure rule
The Measure Rule
 
Score your chart pattern for
performance by clicking here
Top of page   More

 

Expect the market to turn when it reaches the apex of the triangle. See Triangle Apex and Turning Points.

Ascending triangle chart pattern example

Ascending Triangle Example

The figure shows an example of an ascending triangle. Price bounces between two converging trendlines, the top one is horizontal and the bottom one slopes upward.

To calculate a price target, subtract the price of the lowest valley in the chart pattern (A) from the price of the top trendline (B). That gives the height. Multiply the height by 75% (for upward breakouts, the percentage meeting price target from Important Bull Market Results table near the top of this page) and add it to the price of the top trendline B. In this example, point C makes for a good stop location.

For downward breakouts, compute the height in the same manner only subtract the height from C.

-- Thomas Bulkowski

Top of page   More  

Other Ascending Triangle Examples

See Also

Written by and copyright © 2005-2016 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Picked last in gym.