Stock Chart Patterns

 

Stock chart patterns can be a vital tool for investors. They provide an exceptionally detailed level of a stock’s trend lines. This can give a major leg up against the competition. This is why they are used by the likes of retail investors, billion-dollar hedge funds and everyone in between.Basically, best trading patterns platform are a way to view the ups and downs of a stock’s price over the course of time… and then use that information to help predict future movement. They can be a micro-analysis of a single day’s worth of trading. Or they can offer a long-term view of a stock’s performance over the course of several years.

iron condor tend to repeat themselves over and over again. So when investor’s see them forming, they can get a better idea of which direction a stock’s price may be heading. 

 

How the Ascending Triangle Pattern Works

You’ve likely heard somebody say the phrase, “I just happened to be in the right place at the right time.” Stock trading is no different, it’s all about being in the right position at the right time. This is the reason why the ascending triangle pattern is a favorite among many stock traders. For those who understand this chart pattern and trade it correctly, it’s a trading strategy that can result in big profits. It is one of the three important triangle patterns defined by classical technical analysis. The other two being the descending triangle and the symmetrical triangle.

The ascending triangle is a continuation pattern defined by an entry point, stop loss, and profit target. On the price chart, it appears as a horizontal support line connecting the highs to an upward moving trendline to the lows. Each ascending triangle has a minimum of two highs and two lows. In comparison, a descending triangle has a horizontal lower line and a descending upper trendline.

The above chart is a representation of an ascending triangle. It consists of a horizontal resistance line drawn across the minor highs with a rising trend line connecting the minor lows, which form a triangular pattern.

Ascending triangles are continuation patterns because the price usually breaks in the direction it was going before the pattern. As with other types of triangles, the volume often contracts during the charts pattern. Keeping an eye on false breakouts, investors usually enter when the price breakout takes place. The position they take depends on the direction of the breakout – buy for upside direction and sell for downside direction. The stop loss is placed just outside the triangle. To calculate the profit target, traders take into account triangle height at maximum width and adjust that measurement according to the breakout price.