Two trendlines, one drawn across the swing highs and one across the swing lows, angle toward each other over several bars until the range between them has almost nothing left. The eventual break of either line, not the shrinking range itself, is the trade.
“The breakout only counts on a close beyond the trendline, not a wick that pokes through and closes back inside it.”Jason Parker · Founder
A triangle draws itself from two converging trendlines: one connecting a series of descending swing highs, the other connecting a series of ascending swing lows (a symmetrical triangle), or one flat line against one sloped line (an ascending or descending triangle). As the two lines close in on each other, the range between them shrinks bar over bar, and volume typically dries up right along with it. The setup ignores everything inside that shrinking range. It waits for a close beyond one of the two lines, long above the upper trendline or short below the lower one.
Bollinger Band Squeeze Breakout measures the same idea of compression through an indicator, band width relative to its own recent history, not two literal lines drawn from swing points. Narrow Range Breakout compares one single bar's range against the seven bars before it, a one-bar test rather than a multi-bar geometric shape. Bull / Bear Flag Continuation also narrows after a move, but its two boundary lines run roughly parallel to each other and only ever follow a sharp prior leg; a triangle's lines actually converge toward one another and can form without any sharp move setting it up first.
| Entry | On a close beyond the upper trendline (long) or the lower trendline (short), triggered by an actual close past the line with volume stepping up, not a brief wick through it |
| Exit | First target equal to the triangle's widest point, the vertical distance between the two trendlines back where the pattern started; trail behind new higher lows (or lower highs) if the move keeps extending |
| Stop | Just past the trendline on the side that didn't break, since a close back through that same line means the breakout didn't hold |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
A trendline forced through wicks that don't actually line up manufactures a triangle that isn't genuinely there, and trading a break of a line like that is trading noise, not structure. A break that closes past a trendline only to snap back inside it on the next bar is a false start, the single most common way this setup traps traders right near the apex where the range has gotten thinnest. A triangle that forms over many bars without genuine volume behind the eventual break also tends to resolve weakly, since a shrinking crowd of participants isn't the same as one bracing to move.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
Two converging trendlines, one connecting a series of swing highs and the other a series of swing lows, narrowing the range toward a point over several bars. Only a genuine multi-touch line on each side counts, not a single arbitrary high or low.
Entry triggers on a close beyond whichever trendline breaks first, long above the upper line or short below the lower line, not a wick that pokes through and closes back inside. The stop sits just past the trendline on the side that didn't break.
When the trendlines were drawn too loosely to be genuine support and resistance in the first place, or when the break closes beyond the line only to snap back inside it on the next bar, a false breakout this pattern is prone to right near the apex.
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