Is Ascending Triangle Pattern Bullish Or Bearish? It is considered a bullish continuation pattern in an existing uptrend. So when you see this forming in an uptrend, expect a breakout to the upside. However, it can also be a strong reversal signal (bullish) when you see it form in a downtrend. Stop Loss Placement Options You can use the strategies given in symmetrical triangle. Take Profit Options I prefer to target previous resistance levels as my take profit target. Or as shown on the chart below, you can use the x pips distance as your take profit target. Another way to do it would be say 3 times the x pips or 2 times the x pips distance. That should give you your profit target level(s). Copyright 2014 www.swing-trading-strategies.com

Page 60 3. Descending Triangle Chart Pattern Important things to note about the descending triangle chart pattern: The descending triangle chart pattern is characterised by a descending resistance levels and a fairly horizontal support levels converging to a point until a breakout happens to the downside as shown below: And this is how a decending triangle looks like on a chart shown below: Copyright 2014 www.swing-trading-strategies.com Page 61 Is Descending Triangle Pattern Bullish Or Bearish? It is a bearish chart pattern that forms in a downtrend as a continuation pattern. However, this pattern can also form as a bearish reversal pattern at the end of an uptrend. Therefore regardless of where it forms, its a bearish chart pattern. How to Trade The Descending Triangle Formation Similar to the other 2 triangle patterns, you can either trade the initial breakout or wait to see if price reverses back to test the broken support level and then sell.

Copyright 2014 www.swing-trading-strategies.com Page 62 Note: with a triangular pattern, I often prefer to wait for a candlestick to breakout and close outside of the pattern before I enter a trade. This helps to reduce false breakout signals. But there will be times when I will just trade the breakout with a pending sell stop order just a few pips under the support level to catch the breakout when it happens but when I do that, I sit and watch the close of the 1hr candlestick to make sure that it does not close above the support line (if that happens, it may mean a false breakout). And then theres the issues of extremely long breakout candlesticks again like this: As mentioned previously: when you have such extremely long breakout candlesticks like that, better to sit and wait to see if price will reverse and get back up to the support level that was broken ( a retest) which will now be acting as a resistance level and then sell when that level is touched.

How To Take Profit I prefer to use previous support levels, lows or troughs and use those as my take profit target level. Copyright 2014 www.swing-trading-strategies.com Page 63 Another method of take profit that is commonly used is to measure the height of the triangle and if the height is say 100 pips then that is your take profit target. The chart below should give you a clear idea of how its done: Note that on the chart, the descending triangle formed the end of an uptrend. 4. Head & Shoulders Chart Pattern The head and shoulder chart pattern is a bearish chart pattern. This is what a head and shoulder reversal pattern looks like: Copyright 2014 www.swing-trading-strategies.com