$TOMO Performing ascending triangle
TOMO Performing ascending triangle pattern bullishWhat Is an Ascending Triangle?
An ascending triangle is a chart pattern used in technical analysis. It is created by price moves that allow for a horizontal line to be drawn along the swing highs and a rising trendline to be drawn along the swing lows. The two lines form a triangle. Traders often watch for breakouts from triangle patterns. The breakout can occur to the upside or downside.
Ascending triangles are often called continuation patterns since price will typically break out in the same direction as the trend that was in place just prior to the triangle forming.
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CFA Institute. "Technical Analysis."
An ascending triangle is tradable in that it provides a clear entry point, profit target, and stop-loss level. It may be contrasted with a descending triangle.
KEY TAKEAWAYS
The trendlines of a triangle need to run along at least two swing highs and two swing lows.
Ascending triangles are considered a continuation pattern, as the price will typically break out of the triangle in the price direction prevailing before the triangle, although this won't always occur. A breakout in any direction is noteworthy.
A long trade is taken if the price breaks above the top of the pattern.
A short trade is taken if the price breaks below the lower trendline.
A stop loss is typically placed just outside the pattern on the opposite side from the breakout.
A profit target is calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point.
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