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Triangles and wedges: compression is not a direction
The market can become quieter without telling you which door it will leave through.
Classify converging boundaries and write both breakout scenarios.
A triangle compresses swings between converging boundaries. Ascending, descending and symmetrical names describe the boundary geometry, not guaranteed direction.
A wedge has both boundaries sloping broadly in the same direction while converging. It differs from a symmetrical triangle with opposing slopes.
Use several clear swing contacts and fixed drawing rules. Constantly redrawing lines until the last candle fits hides failed interpretations.
A breakout rule needs a threshold, confirmation and failure condition. Waiting for confirmation can miss a move; acting earlier risks trading inside unfinished compression.
Let’s work through it
- Use consistent swing contacts
- Classify boundary slopes
- Write both breakout cases
Let’s use numbers · hypothetical example
Highs 110,108,106 and lows 100,102,104 illustrate compression. Prepare an upward break-and-hold case and a downward case before the next swing; the squeeze alone chooses neither.
Easy mistakes to watch for
- Compression guarantees direction
- Redrawing every failure
- Ignoring news costs
Keep in mind
Avoid projecting an exact move from a tiny or selectively drawn shape. News can expand spreads and invalidate neat geometry.
Your turn
Draw a symmetrical triangle and a rising wedge. Mark a failed breakout for each.
A quick check before we move on
What does a converging triangle establish by itself?
- A guaranteed downward break
- Contracting swings, with direction unresolved
- A guaranteed upward break
Check answer
Contracting swings, with direction unresolved Geometry describes compression. The next directional outcome remains uncertain.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
