Group: Trend Continuation
Definition:
A consolidation pattern of uncertainty, where both highs and lows contract. The breakout often follows the direction of the prior trend.
Key Characteristics:
- Converging support and resistance lines
- Declining volatility
- Strong impulse breakout
How to Trade:
Enter in the direction of the breakout. Place the stop-loss beyond the opposite side of the triangle.
Common Mistakes:
- Trying to predict the breakout direction
- Entering too early
Conclusion:
A versatile pattern widely used in technical analysis — even machine learning models are trained on it.
