Different traders enter the market at different times with different trading strategies. Understanding the Reason Why Triangle Patterns WorkĪs you know, even during a trend, the market usually never climbs or falls freely. To identify if a continuation or reversal pattern, you can use more elaborate technical analysis tools such as Elliot Waves or simply combine other technical indicators and take a more commonsense approach. For example, if you see a triangle pattern forming after a series of bullish or bearish moves, it can easily signal a reversal as well. However, the majority of the time, bilateral patterns end up breaking in the direction of the prevailing trend and that’s why most traders recognize these as continuation patterns.ĭepending on the location of the triangle pattern, it can also signal a reversal of the prevailing trend. Being a signal for trend continuation or reversal, triangle patterns are often called bilateral pattern. One of the best ways to figure out if a trend will continue or not is learning to identify triangle patterns. When Forex traders talk about the triangle pattern, they are indicating a very specific chart pattern, usually identified when the upper and lower ends of a price action form trend lines or a combination of a trend line and a horizontal line that intersect each other, creating a triangle.įigure 1: Ascending, Descending, and Symmetrical Triangle Patterns However, during those few precious moments of a trending market, the price action often gives out hints about whether the trend will continue or reverse. In fact, the majority of a trader’s screen time is spent looking at a price chart where the currency pairs move up and down between a narrow range. Anyone trading Forex or any other financial markets for a while knows that trends don’t last long.

Bottom triangle pattern