Definition
A triangle is a consolidation pattern in which price swings grow progressively narrower, so that the highs and lows converge toward a single point. The shrinking range traces two trend lines that meet, giving the pattern its name. It is one of the most common formations on any chart.
Triangles come in three varieties. A symmetrical triangle has a falling upper line and a rising lower line — both sloping toward the apex. An ascending triangle has a flat top and a rising bottom. A descending triangle has a flat bottom and a falling top.
Why it matters
How it works
A triangle forms when each new price swing covers less ground than the last, compressing the range as buyers and sellers reach a tighter and tighter balance. That coiling tension is eventually released by a breakout through one of the converging lines. Ascending triangles more often break upward and descending triangles downward, reflecting which side is quietly accumulating, while symmetrical triangles can resolve either way.
Triangles most often act as continuation patterns, marking a pause within a trend, but they can also precede a reversal — the breakout direction settles the question.