BAJAJ BROKING
February 19, 2025
4 mins read
Triangle patterns are technical analysis tools that are widely used in the stock market. They represent a consolidation phase in an asset’s price. Read more...Typically, a consolidation phase precedes a significant breakout, which can be on the upside or the downside. Three types of triangle patterns exist: Ascending Triangle, Descending Triangle, & Symmetrical Triangle Read less
Triangle patterns show a period of consolidation in a security’s price during which the price moves within two converging trendlines, eventually forming a triangle. In most cases, this phase of consolidation precedes a considerable breakout, which can happen either on the upside or on the downside. If you are keen on this topic, do read this blog because it discusses such patterns in detail and also how triangle patterns help in trading.
A triangle chart pattern is a technical analysis tool that is popular among traders. As the name suggests, this pattern resembles a triangle. To depict it, analysts draw trendlines alongside a converging price, which suggests a pause in the existing trend.
Even though the triangle pattern is a continuation pattern, traders have to search for breakouts before exiting or entering a position.
Triangle patterns are usually formed when the trading range of an asset becomes narrow in such a way that the lower and upper trendlines form a corner by meeting at the apex on the right side.
You need to connect the highs to form the upper trendline, while the lower trendline is created by joining the lows. When you connect the start of the lower trendline with the beginning of the upper trendline, you complete the other two corners, thereby forming a triangle.
In terms of what they signify and how they look, triangles are quite similar to pennants and wedges. Wedges are patterns formed by trendlines that converge. And, pennants are essentially patterns that signal a continuation when a security shows a considerable movement.
There are three types of triangle chart patterns in trading: ascending, descending, and symmetrical. Let us discuss in detail as to what they mean and how they are formed.
Ascending Triangle: An ascending triangle pattern is formed when a security’s price, accompanied by an increasing volume, breaches the upper horizontal trendline. This indicator is a sign of bullish sentiment prevailing in the market. In other words, it is a bullish triangle pattern.
However, for it to be formed, the upper trendline has to be horizontal. This is because a horizontal upper trendline shows almost identical highs, which create a resistance level. Meanwhile, the lower trendline moves up diagonally, which shows that buyers are creating higher lows, as they are gradually increasing their bids.
Eventually, buyers will start purchasing the security at a higher price than its resistance level, which will result in even more people buying the security. As a result, the uptrend will continue. Consequently, the upper trendline becomes support from being a resistance earlier.
Descending Triangle: A descending triangle is quite the opposite of an ascending triangle. It is a famous breakout pattern. In this case, the lower trendline must be horizontal, joining almost identical lows. Meanwhile, the upper trendline keeps on declining diagonally in the direction of the apex.
When the price falls to such an extent that it is lower than the support level created by the horizontal trendline, a breakdown happens. As a result, the lower trendline becomes the resistance from being the support.
Symmetrical Triangle: A symmetrical triangle pattern has two components. One, an upper trendline that falls diagonally. Two, a lower trendline that diagonally moves up. While moving towards the apex, the price eventually ends up breaching the upper trendline and a breakout occurs. However, there is another possibility, as the price on its journey towards the apex can also breach the lower trendline, resulting in a downtrend trend in the price.
Traders need to be extra careful while analysing this pattern. They need to analyse minutely the volume of hikes for at least two closes beyond the trendline to ensure the break’s validity because it could very well be fake.
Typically, such triangles tend to be continuation break patterns. In other words, they have a tendency to break in the initial move’s direction before the triangle’s formation. Hence, in case an uptrend precedes a symmetrical triangle, you should expect the price to breach the upside.
Additional Read: What Is a Candlestick Pattern?
Additional Read: Technical Analysis Guide
Triangle patterns can help all kinds of market participants, including those who are just about to begin their journey by opening a trading account and those who are experienced traders.
That said, you need to identify them correctly. For that, both patience and skill are required. Most importantly, you should not take a call based solely on a triangle pattern because it can be risky. Hence, you must use several charting patterns to take a decision.
Do you have a trading account app or demat account app?
You can open an account with Bajaj Broking in minutes.
Download the Bajaj Broking app now from Play Store or App Store.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://www.bajajbroking.in/disclaimer
Share this article: 
This pattern shows a consolidation phase, wherein a security’s price moves within converging trendlines. Typically, a consolidation phase precedes a considerable breakout, which can be either on the upside or the downside based on the market conditions.
The three variations of the triangle chart pattern are: Ascending Triangle, Descending Triangle, & Symmetrical Triangle.
The triangle pattern has variations, which show the formation of a bullish or bearish trend. For example, the ascending triangle pattern is usually bullish, while the descending triangle is typically bearish.
A trader should not take a decision based on one technical pattern alone because it could be risky. Hence, he should decide based on several technical patterns.
Technical analysis means using various chart patterns, trends, and indicators to predict the direction of a security's price.
Triangle patterns function as a consolidation phase, where the range of an asset’s price narrows down between two converging trendlines. Such patterns usually suggest a breakout.
It depends upon which triangle pattern we are talking about. The descending triangle pattern suggests a bearish trend in an asset’s price, while the ascending triangle pattern indicates a bullish trend.
No Result Found
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading
TRENDING CALCULATORS AND STOCKS ON BAJAJ BROKING
POPULAR STOCKS: Tata Motors Share Price Infosys Share Price IRFC Share Price SBI Card Share Price Cipla Share Price NBCC Share Price IDFC First Bank Share Price IRCTC Share Price PNB Share Price Zomato Share Price Vodafone Idea Share Price Axis Bank Share Price JSW Steel Share Price Bandhan Bank Share Price SBI Share Price Tata Steel Share Price ONGC Share Price Ashok Leyland Share Price Paytm Share Price Subex Share Price DLF Share Price Reliance Share Price HDFC Bank Share Price Suzlon Share Price IOC Share Price HUL Share Price Asian Paints Share Price Bank Of Baroda Share Price ITC Share Price TCS Share Price HFCL Share Price Icici Bank Share Price Tata Chemicals Share Price CDSI Share Price MRF Share Price Tata Power Share Price Adani Green share price BPCL Share Price Vedanta Share Price Dmart Share Price Hindalco Share Price LIC Share Price SAIL Share Price Adani Port Share Price IEX Share Price Nalco Share Price L&T Share Price Adani Power Share Price BHEL Share Price Bajaj Finance Share Price Canara Bank Share Price Indusind Bank Share Price Gail Share Price Yes Bank Share Price Wipro Share Price Happiest Minds Share Price Coal India Share Price Maruti Share Price Reliance Power Share Price
INDIAN INDICES: Nifty 50 Share Price SENSEX Share Price Nifty Next 50 Share Price BSE100 Share Price Nifty Bank Share Price LRGCAP Share Price Nifty 100 Share Price MIDCAP Share Price Nifty 200 Share Price SMLCAP Share Price Nifty 500 Share Price BSE500 Share Price Nifty Midcap 50 Share Price ALLCAP Share Price NIFTY SMLCAP 50 Share Price BSE200 Share Price India VIX Share Price BSEIPO Share Price
