Triangle Pattern Scanner

Stocks coiling into a triangle, boxed in a rectangle, or swinging wider in a broadening pattern. The bottom and top versions tell you which way the first move went: a bottom started up, a top started down.

Trade Ideas does not label ascending, descending or symmetrical triangles separately, so this page does not claim that.

The triangle alerts need at least five turning points in a row where each high is lower and each low is higher. That is a range squeezing toward a point.

The name comes from the first move: a triangle bottom started with a move up, a triangle top with a move down. The alert fires when the pattern is complete and lists the turning point prices.

The rectangle alerts use the same five-turn count, but the highs and lows stay at about the same prices instead of narrowing.

The pattern alert tells you the triangle is there. For the break, add Channel Breakout (CHBO) or 5 Minute Consolidation Breakout (CBO5) on the same window, with Relative Volume (RV) for volume.

1. In TI Pro, open a Streaming Alerts window with the six pattern alerts.
2. Add Channel Breakout and Consolidation Breakout for the break.
3. Add Relative Volume, Price and Dollar Volume.
4. Save and turn on sound.

1. Price makes a swing high, then a swing low.
2. The next high is lower and the next low is higher.
3. After at least five turning points, the range has narrowed into a triangle.
4. Price breaks out one side.

A rectangle is price bouncing between two flat levels. Traders read the top as resistance and the bottom as support, and watch for the break.

A broadening pattern is the opposite of a triangle: highs get higher and lows get lower. It often shows an unsettled market.

The names describe the first move. A triangle bottom began with a move up; a triangle top began with a move down. They do not predict the break.

See the breakout scanner and the squeeze scanner for other ways to find narrowing ranges.

1. A stock runs up, then swings: a high, a higher low, a lower high, another higher low.
2. After five turning points, the range has narrowed. GTBOT fires because the first move was up.
3. Price presses against the top of the triangle as volume picks up.
4. A channel or consolidation breakout alert fires on the break. Traders often set a stop back inside the triangle.

A triangle after a strong run up often gets read as a pause. Add Change (5 day, %) (U5DP) at a min like 10 to see triangles that follow a 5-day run.

Trade Ideas names a triangle by its first move. Triangle Bottom (GTBOT) is a triangle whose first move was up; the help definition says the pattern is complete when price breaks through resistance. Triangle Top (GTTOP) started with a move down and completes on a break through support. The name is not a forecast.

Rectangle Top (GRTOP) and Rectangle Bottom (GRBOT) fire when a stock makes at least five turns with the highs and lows ending at about the same prices. A rectangle top means the last turn was a high; a rectangle bottom means it was a low. Rectangles are ranges with clear edges, which makes stop placement simple.

Broadening Top (GBTOP) and Broadening Bottom (GBBOT) are the opposite of a triangle: highs get higher and lows get lower. The range is widening, which means volatility is rising. Many traders stay out or trade smaller in them.

Like the other geometric alerts, the triangle alerts can be filtered by how many trading hours the pattern took. A triangle over two hours is an intraday setup. One over 20 hours spans several days and is closer to the textbook daily chart pattern.

Triangle window

Example numbers, not a real trade

1. GTBOT fires on a stock at $15.40 after five turns between $15.10 and $15.80.
2. The plan: buy over the last lower high at $15.60.
3. Stop under the last higher low at $15.30.
4. Target: the widest part of the triangle ($0.70) added to the break, about $16.30.

As the range tightens, volume usually drops. Traders read that as the market waiting. The break is the moment it stops waiting, which is why volume on the break matters more than volume inside the pattern.

Relative Volume (RV) above 1.5 on the break is a common filter. Strong Volume (SV), the Strong Volume alert, fires as today’s volume reaches 1, 2 and 3 times the daily average, which helps confirm a break that is drawing real size.

A stock that gaps and then trades in a narrowing range for the first hour is forming a triangle at the open. The break out of that range often sets the direction for the rest of the morning. Run the triangle alerts with a short hours setting and a gap filter to see those.

Price can poke out of a triangle and come right back. Some traders wait for a bar to close outside the pattern. Others use the confirmed consolidation or channel alerts, which wait for more trading past the level.

If price comes back inside, the trade is wrong. That is the advantage of a triangle: the stop is close and clear.

The usual target is the height of the triangle at its widest point, added to the breakout. A triangle that has narrowed almost to a point has a small target left, which is why some traders prefer breaks that come about two thirds of the way into the pattern.

Triangles break both ways. Wait for the break.

Test your rules in a simulated account first.

• Guessing the direction before the break.
• Trading a triangle on a stock with a wide spread, where the pattern is mostly noise.
• Treating the alert name, top or bottom, as a forecast.
• Holding after price falls back inside the pattern.