When it comes to analyzing the market, there are basically two routes to go down. The first one would be the old faithful fundamental analysis which looks at, you guessed it, fundamental economic and financial criteria to evaluate their impact on the forex market. On the other hand, we have technical analysis.Â

Technical analysis is the bread and butter of any forex trader. In technical analysis, traders will rely upon data and information regarding past and recent price movements in order to make predictions about upcoming prices.Â

There are just so many different formulae in technical analysis that help traders come up with a pretty reliable pattern about upcoming price movements. These different formulas in technical analysis are known as technical indicators.Â

One of the more useful and practical technical indicators is the ** ascending triangle**, and that is exactly what we will be focusing on in this article.

**What Is the Ascending Triangle?Â **

So as we just discussed, the ascending triangle is a technical indicator that is implemented as part of technical analysis. The way the ascending triangle is formed is via a horizontal line that is seen along swings highs and another rising line that is seen along swing lows. As such, those two lines would be part of a triangle.Â

At the same time, forex traders should also be on the lookout for the breakouts that might occur from the trainable. These breakouts could go either way, up or down.Â

But luckily, the unexpected rarely occurs with ascending triangles. Because the price breakout is almost always in the same direction as the triangle. For this reason, ascending triangles are also known as continuation patterns.Â

The ascending triangle indicator can provide traders with very valuable information such as entry points, exit points or stop loss levels, in addition to a profit limit or target.Â

**Bite Size Info on the Ascending TriangleÂ **

In order for the ascending triangle to form, the lines of the triangle need to be along two swing highs as well as two swing lows. The ascending triangle is a continuation pattern, and traders can normally rely on the price breakouts form the triangle, as it will normally be in the same direction as the triangle.Â

But, a price breakout could occur in any direction. This is how the traders ought to use the ascending triangle in order to take their position. If the price breakout is above the top line, then the position should be a long position.Â

On the other hand, if the price breakout is below the trend line on the bottom, then the position should be a short one.Â

Of course, as we mentioned before, the ascending triangle also provides information regarding profit targets and exit targets or stop loss.Â

Letâ€™s start with a profit target. The way an ascending triangle can help specify the profit target is by calculating the height of the triangle. Then from that highest point, the breakout point is subtracted or added to, depending on the breakout.Â

On the other hand, a stop loss can be calculated with the help of the ascending triangle by placing it over and outside the pattern on the other side of the price breakout.Â

**What Exact Information Can Ascending Triangle Provide?Â **

As previously discussed, precisely because the ascending triangle is a continuation pattern and its breakout usually follows its own trajectory, it will work much better if it happens on a market trend, either an uptrend or a downtrend.Â

Now, obviously regarding the trajectory of the trend, when the breakout from the ascending triangle occurs, the traders will either go on a buying or a selling spree.Â

And the way the price breakout from the triangle is confirmed is through higher volumes of trades. When trading volume goes up, then it can be a confirmation for the price breakout. This is because more volume is a sign that more traders are coming to ride the trend, whatever it may be.Â

Furthermore, another piece of valuable info can be found with respect to the two lines of the triangles. Of course a minimum of two swing highs and swing lows are needed to form the trend lines. But if there are more lines, that can also be an added layer of confirmation.Â

Of course as prices continue changing the two lines of the triangle become closer to each other until the breakout takes place.Â

Now, pay attention that trading volume goes up when there is a trend in the market, not usually when there is a period of consolidation. And as it was just mentioned, the triangle leads up to an eventual consolidation after which the price breakout occurs. So donâ€™t expect a higher volume of trading prior to or during the consolidation period. Although a higher volume can be expected when the eventual price breakout takes place.Â

So paying attention to the trading volume is really important as it is a confirmation for the breakout. This means if the price breakout is accompanied with a low trade volume, then it means the breakout is not strong enough and has not been able to garner enough momentum from the traders in the market. In that situation the trend would revert back to the pattern again until another consolidation would take place for yet another possibly stronger price breakout.Â

**Where Should You Place the Entry Point with Ascending Triangle?**

So this is one of the big questions with any technical indicator and any formula. Getting the actual entry point is kind of the most important part of this whole thing. Traders want to calculate the best moment to enter into a position.Â

With an ascending triangle, the entry point needs to be placed right after or on the price breakout point. And the position for the entry needs to be a short position, i.e. selling, if the breakout is on the down side. And vice versa, meaning you should take a long position, i.e. buying, if the breakout takes place on the up side.Â

Another significance of the entry point, which coincides with the point of price breakout, is that it is used in calculating the profit targets.Â

Again, depending on the trajectory of the breakout, in order to calculate the target for your profits, you need to subtract the height of the triangle from the breakout or add the height of the triangle to the breakout point.

For example, if the height of the triangle is 10 dollars, then for a downward price breakout, you need to put the profit target 10 dollars below the breakout point. And on the other hand, if the price breakout is on the upper trajectory, then you need to add 10 dollars to the price breakout to calculate your profit target.Â

In another article, we introduced the top chart patterns.

**ConclusionÂ **

Ascending triangle is a chart pattern indicator that consists of a horizontal line that forms the upper part of the triangle. And then another line on the bottom that is moving higher, forming the lower part of the trainable; which is thus a triangle that is ascending.Â

This technical indicator provides crucially valuable information regarding, entry point, exit point, and profit targets.Â