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Glossary · Chart and price

Triangle

A consolidation pattern in which highs and lows converge into a narrowing shape — ascending, descending or symmetrical — often before a breakout.

By Sky Trade editorial teamUpdated

A triangle forms when price swings shrink and the lines through the highs and lows converge. Three versions are usually described:

  • Ascending: flat top, rising lows — buyers keep pressing against a ceiling.
  • Descending: flat bottom, falling highs — sellers keep pressing against a floor.
  • Symmetrical: falling highs and rising lows meeting in the middle.

Triangles are periods of compression. Volatility contracts, and at some point price breaks out of the shape. Ascending and descending triangles are often read as leaning towards a break of the flat side, while the symmetrical one is treated as neutral. These are tendencies, not rules; triangles break the “wrong” way regularly.

Two practical warnings. Breakouts near the very tip are often weak, because by then the pattern has lost its structure. And false breakouts of triangle lines are common, so many traders wait for a close outside and sometimes a retest.

The shrinking ranges inside a triangle resemble a Bollinger squeeze. Seeing both doesn't make the direction of the break more predictable, but it helps you notice compression early. See chart patterns.

Example

USD/JPY highs flatten at 151.50 while lows rise from 151.10 to 151.30: an ascending triangle. An M5 close at 151.58 is the breakout; a drop back below 151.45 would make it look false.

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