The ascending triangle formation is a trend continuation formation frequently used in technical analysis. This formation generally indicates that an upward trend will continue.
The formation refers to a chart where the top prices decline from a horizontal band and the bottom points show an upward trend. In an ascending triangle formation, prices test the resistance level several times, and the more times this resistance is tested, the weaker it becomes.
However, the support level gets stronger as it constantly finds support from higher up. This increases the strength of the formation and may be a sign that the rising trend will continue.
The target point of the ascending triangle formation is to rise as much as the depth of the rising trend formed by the horizontal resistance band and the bottoms. According to this rule, an upward movement is expected by breaking the resistance level first in the ascending triangle formation.
However, as with every formation, the ascending triangle formation may also have traps and false breakouts. On the other hand, although formations are reliable chart models in the field of finance, they do not always give accurate and precise results.
The working rate of the formations is around 60-65%, which means we need to trust the formations 100%. Therefore, it is important to consider other factors when using technical analysis tools such as the ascending triangle formation when making investment decisions.
