Triangles
There are 3 types of triangles:
• Symmetrical Triangle
• Ascending Triangle
• Descending Triangle
These are all continuation patterns so are best used in the direction of the trend.
Descending Triangles
This pattern has a flat bottom line and falling trend line from above. This should breakout in the direction of the previous trend.
This should be used in downtrends as descending triangles are bearish patterns, volume should be higher on the flat bottom line breakout. Once broken this line then becomes resistance.
Please click on chart below for larger image
Targets
Its best to use the widest point of the triangle as a measuring tool. If for example at the widest point it was 50 pips long then the target is going to be 50 pips from the breakout point.
Note
Triangles can take from 1 month to 3 months to form and any smaller than 2 weeks could be a pennant or flag.
