M4 · Part 1 — Continuation patterns · Lesson 20/144
8 min 50 XP
All triangles are a squeeze between a supply line (the highs) and a demand line (the lows). What differs is which side is flat — and the flat side is usually where price escapes. An ascending triangle has a flat top and rising lows: buyers keep paying up to the same ceiling until it cracks, so it tends to break up. A descending triangle has a flat floor and falling highs: sellers keep hitting the same floor until it gives, so it tends to break down. A symmetrical triangle has both sides converging: it is balanced, so you trade whichever side breaks.
Mark the two lines. Wait for a candle to close beyond one of them — never act on the first wick through, which is the classic fake-out. Then either enter on that close, or wait for price to retest the broken line and hold (lower risk). Your target is the height of the triangle at its widest part, projected from the breakout. Your stop sits just back inside the triangle, where the breakout is proven wrong.
The fake-out
Triangles are famous for false breaks — a stab beyond the line that snaps right back inside to trap early traders, then explodes the other way. The wick is bait; the close is truth. Patience for the close (or the retest) is the whole edge.