Currency Trading Trend Types - Symmetric, Ascending and Descending Triangle Patterns
The triangle is the most used shape used in online currency trading. There are three types of triangles used for reading currency trading charts :
- symmetrical triangles
- ascending triangles
- descending triangles
Symmetrical triangles can be identified using the following criterions :
- First, the symmetrical triangle always follows a certain trend.
- The start of the triangle is made of a high and low price that are very much apart.
- As the triangle pattern continues, the low and high prices draw nearer, and when they almost meet, then the currency trading pattern continues with the previous trend.
The fact that the pattern continues as before is why symmetrical triangle, as all other triangles, are called continuation patterns.
The symmetrical triangle can also be noticed through the sloping support and resistance levels. The support line's direction is upward and the resistance line's direction is downward. At the end of the pattern these lines meet.
The importance of these pattern is not just to identify the upcoming continuation uptrends and downtrends, but to foresee a rapid change in currency trading price direction, which usually follows symmetrical triangles.
Ascending and Descending Triangles
Ascending and descending triangles opposites, and have quite similar features.
In ascending triangles, the low prices rise, much like with symmetrical triangles. The difference is that the high prices stay constant and do not drop. This means that the support line for ascending triangles rises, while the resistance line doesn’t change.
Descending triangles are the opposite, with a drop in high prices and in resistance levels, and a steady pace for low prices and support levels.
With both triangles, after the support and resistance levels meet, the pattern usually continues as the previous currency trading trend.
Posted by Greg Paster