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An ascending triangle is a chart pattern formed by a flat horizontal resistance line at the top and a rising trendline connecting higher lows underneath. It usually signals bullish continuation, meaning price often breaks upward through resistance. The rising lows show buyers gaining strength while sellers defend one price level. It is not guaranteed, however, so traders wait for a confirmed breakout, ideally on rising volume, before acting.

A descending triangle has a flat horizontal support line at the bottom and a falling trendline of lower highs above it. It is typically a bearish continuation pattern, suggesting price is more likely to break down through support as sellers steadily pressure buyers. In a downtrend it often signals further declines. Like all patterns it indicates probability, not certainty, so confirmation through a decisive close below support is important.

Traders typically wait for price to close beyond the flat line (above resistance for ascending, below support for descending) rather than anticipating the move. A common entry is on the breakout candle or a retest of the broken level. Stops are often placed just inside the triangle. The measured-move target is the triangle’s widest height projected from the breakout point. Trading CFDs on these moves carries risk, as false breakouts are common.

Look for at least two roughly equal highs forming a flat horizontal ceiling, plus two or more rising lows that create an upward-sloping support line converging toward that ceiling. The price action should coil into a narrowing range as it approaches the apex. Volume often declines during formation and expands on breakout. Draw both trendlines to confirm the shape before treating it as a valid pattern.

The key difference is orientation and bias. An ascending triangle has flat resistance on top and rising support below, leaning bullish with an expected upside breakout. A descending triangle has flat support on the bottom and falling resistance above, leaning bearish with an expected downside breakout. Both are usually continuation patterns following the prevailing trend, and both are confirmed only once price breaks decisively out of the converging range.

A frequent mistake is entering before the breakout is confirmed, which exposes traders to false breaks where price briefly pierces the line then reverses. Another is ignoring the broader trend, since triangles work best as continuation setups aligned with it. Traders also forget to place a protective stop, leaving positions vulnerable. Waiting for a decisive close and, ideally, a volume increase helps filter out unreliable signals.