What is Triangle Formation?

triangle formation

It is a pattern that shows the trend is continuing. This formation is a pattern that occurs when every rise is below the previous peak and the lowest point of each fall is above the previous low. Itt has three forms: Ascending triangle formation, descending triangle formation, and symmetrical triangle formation. When it occurs, prices fall or rise to the lowest “P” price range. It is not known in what direction the prices will take shape in the formations. However, after the triangle breaks, it is determined in what direction the prices will take shape. If there is a break in the upper line of the triangle, this means that there will be an increase. If the bottom line of the triangle is broken, it means that there will be a decrease. If the last price stays on the outside of the triangle, it could mean the triangle is broken. Breaking the triangle line with the short-term fluctuation in prices does not mean that the triangle is broken. If the triangle breaks, prices begin to move in the breaking direction of the triangle.

Triangle Pattern Calculation

P = ⅓ * T

P = Price range

T = Time

Symmetrical Triangle Formation

It is called symmetrical because the line between the upper part and the lower part of the line drawn in the middle of the triangle is symmetrical. It is necessary to wait for the pattern to end in order to learn which direction the prices will take shape in this formation.

Ascending Triangle Formation

In this formation, the hypotenuse line of the triangle shape rises considerably. Increasing price consists of higher numbers at each lower level than the previous lower level. The size of the downward shaping decreases with each backward movement. Thus, gradually narrowing price movements are seen. To make sure that the rising triangle pattern has been broken, it is necessary to observe that the movements continue for a while after the resistance line is crossed.

Descending Triangle Formation

When the descending triangle formation occurs, it is seen that there is a decrease in prices.

There are many methods for Forex analyses. Reading graphics is one of the most needed skills for this. Improving over time will be extremely beneficial for those who will invest in Forex and similar fields.

SEE ALSO: How to Read Forex Charts?

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Caroline Tetra

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