Taking a Technical Approach to Forex Trading

Triangles and Trend lines

Another common and useful chart pattern is the triangle. First, to understand this pattern, one must be familiar with the use of trend lines. A trend line is drawn by the chartist by tracing either the highs or lows of a currency pair over time, showing a trend (see figure 5). So, a triangle can be shown by trend lines that begin to converge, forming a triangle pattern. A descending triangle (see figure 6) pattern is made from a trend of lower highs over time, and an ascending triangle is made from a trend of higher lows over time. Both of these patterns indicate that the currency pair is about to break out beyond the top or bottom trend line. (See figure 7).


(Figure 5)

(Figure 6)

(Figure 7)