In this session, we’ll be looking at the first type of continuation pattern – the Triangle.

However, there are actually 3 different types of triangle patterns, including symmetrical, ascending, and descending.

Let’s take a closer look.

Each triangle consists of a base, the widest part of the triangle, and two converging lines at the apex.

So, in the symmetrical triangle, the upper line is descending while the lower line is ascending, and they converge at the apex.

Now that you have an idea of what the symmetrical triangle looks like let’s talk about the points needed to draw the lines.

Think about it like this: to draw a straight line, a minimum of two points are needed, right?

Well, the same applies to each of the converging lines in a triangle.

However, while 2 lines are the minimum, it’s not uncommon that converging lines consist of more points, such as 4 or even 6.

In this symmetrical triangle, points 1 and 3 are needed to draw the descending upper line, and points 2 and 4 are needed to draw the ascending lower line. In other words, the pattern consists of at least 2 lower highs and 2 higher lows.

Notice how point 3 is lower than point 1 in the descending line, and point 4 is higher than point 2 in the ascending line. These points determine what kind of triangle the formation is.

For example, if point 3 was on the same level as point 1, a horizontal upper line would be drawn rather than a descending one. This would change the type of triangle that this is.

But one thing is always guaranteed: eventually, the prices break out of the triangle. And in most cases, the prior trend resumes.