Below is a seven-slide quiz to test your ability to identify ascending triangles and trade them. Captions appear below the pictures in red for guidance, so be sure to scroll down far enough to read them.
This quiz is dedicated to Vicky Wong who expressed interest in seeing more quizzes.
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Ascending triangle: three or more touches on one side, two or more touches on the other with price crossing the pattern often. Volume usually trends downward until breakout.
Notice no minor high or low appears within a few days of crossing the blue line. More about this behavior in slide 4.
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Find as many ascending triangles as you can. For help, click here.
3 / 7
The left triangle was easy to find, but not the one on the right. The top trendline (right triangle) has two minor high touches, but cuts through price on touch 3. It's okay, though. The bottom trendline has three touches even though the most recent touch came after the breakout.
4 / 7
If you draw the pattern's lines carefully, the triangle's apex will form within a few days of a minor high or low (minor high B matches apex A, D matches apex C). See this
article for the proof. Slide 1 doesn't show this behavior. Price just keeps dropping, so this technique doesn't always work nor does the turn always lead to a significant trend.
5 / 7
Weekly scale. Which horizontal green line will show where price bottoms? The next slide shows potential support lines on the daily scale.
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Daily scale. Where will price bottom? Letters show touch points except C, which includes many touches. A downward breakout happens before A. Notice volume didn't rise much, but is that important?
7 / 7
If you guessed 29 or 22, you were correct. Price bottoms at 22 (A) or 29 (ultimate low). Notice minor high below the apex at B. This minor high marks a significant turn.