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    Ascending Triangle: Trade Setup

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    amithr
    The document describes the setup and strategy for an ascending triangle pattern. An ascending triangle forms when a stock trades sideways within a narrow range for at least 5 days, with higher lows and relatively equal highs, signaling accumulation. It provides criteria for the trade, including that the market and sector be strong, volume tapers during consolidation, and no upcoming earnings. The trigger is a breakout above the consolidation high. The entry is a buy stop limit order above this trigger price. The initial stop loss is a sell stop below the last swing low or 1 average true range below the entry price.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Ascending Triangle: Trade Setup

    Uploaded by

    amithr
    45 views1 page
    The document describes the setup and strategy for an ascending triangle pattern. An ascending triangle forms when a stock trades sideways within a narrow range for at least 5 days, with higher lows and relatively equal highs, signaling accumulation. It provides criteria for the trade, including that the market and sector be strong, volume tapers during consolidation, and no upcoming earnings. The trigger is a breakout above the consolidation high. The entry is a buy stop limit order above this trigger price. The initial stop loss is a sell stop below the last swing low or 1 average true range below the entry price.

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    book

    Original Title

    Asc Triangle

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    The document describes the setup and strategy for an ascending triangle pattern. An ascending triangle forms when a stock trades sideways within a narrow range for at least 5 days, with higher lows and relatively equal highs, signaling accumulation. It provides criteria for the trade, including that the market and sector be strong, volume tapers during consolidation, and no upcoming earnings. The trigger is a breakout above the consolidation high. The entry is a buy stop limit order above this trigger price. The initial stop loss is a sell stop below the last swing low or 1 average true range below the entry price.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    45 views1 page

    Ascending Triangle: Trade Setup

    Uploaded by

    amithr
    The document describes the setup and strategy for an ascending triangle pattern. An ascending triangle forms when a stock trades sideways within a narrow range for at least 5 days, with higher lows and relatively equal highs, signaling accumulation. It provides criteria for the trade, including that the market and sector be strong, volume tapers during consolidation, and no upcoming earnings. The trigger is a breakout above the consolidation high. The entry is a buy stop limit order above this trigger price. The initial stop loss is a sell stop below the last swing low or 1 average true range below the entry price.

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    © All Rights Reserved
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    Ascending Triangle

    Strategies

    Trade Setup
    Always Criteria
    Top Down Approach: Market is STRONG and/or Stock
    is in a STRONG area (sector/industry group) of the
    market
    Uptrend: Stock has recently made a new swing high
    Price Relative indicator is positive
    From new swing high, stock trades sideways
    (consolidates) in a narrow range with relatively equal
    highs and ascending lows (pinching together from
    below). This consolidation should bring the price back
    into one of the following:
    Lower Trendline
    20 Day SMA
    50 Day SMA
    Prior Support/Resistance Level
    Consolidation lasts a minimum of 5 days (and often
    much more)
    Minimum 300,000 shares of average daily volume
    Volume often tapers during consolidation- watch for low
    volume as a clue to when stock is nearing a break out
    Reward to Risk ratio: minimum 2:1

    No earnings date in the next 10 trading days (DO NOT


    hold through earnings!) or pending news in near-term

    Long Stock
    Covered Calls
    Long Calls
    Short Puts
    Bull Call Spreads
    Bull Put Spreads
    Diagonal Call
    Calendar Spread

    Trade Trigger:

    Stock Breaks High of


    Consolidation (or a
    recent group of
    relatively equal highs)

    Entry Order:

    Buy Stop Limit- for


    Controlled Entry
    GTC Order (usually)
    Stop: Trigger Price
    (from above)
    Limit: 10-20 cents
    above stop

    Initial Stop Loss


    Order:

    Sell Stop (Mkt) below


    last mini-swing low or
    1 ATR below entry
    GTC

    Reward/Risk Exercise
    Target
    Entry
    Stop
    Reward
    Risk

    R/R Ratio

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