Triangles & Wedges

How converging trendlines form ascending, descending and symmetrical triangles and rising or falling wedges, and what each one tends to signal.

Price getting squeezed

Triangles and wedges form when the range between highs and lows gets narrower over time. You can draw one line along the highs and another along the lows, and the two lines move toward each other. The squeeze shows buyers and sellers reaching a standoff. Eventually one side wins and price breaks out of the pattern, often with a burst of volume.

The shape of the lines hints at which side is gaining ground, which is why traders care about the difference between the types.

Unlock all of Investing School

The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.