Explained Trade: Ascending Triangle in EUR\USD

A ascending triangle trade in the EUR\USD, on 15-minutes chart. I spotted this pattern after the second downswing on the horizontal support level. The triangle size was 73 pips, measured from his tallest point to the support level.

These patterns can break in both direction - both up at breakout of resistance and down at the breakout of support. In this example the breakout was upwards. I didn't enter at the breakout itself, as this is usually a weak entry and subject to fakeouts (false breakout). Instead, I entered at a conservative trade at the pullback to the resistance trend line. A Bullish Engulfing Japanese candlestick confirmed the entry. This is a very strong bullish formation.

After the candlestick confirmation, stop loss was measured from the current price to 1 pips below the lowest low - 23 pips. Target was projected as 73 pips from breakout, and Risk:Reward ratio was 1:2.17 (Take Profit - Stop Loss / Stop Loss). A trade was issued and reached target in few hours.

Total Result: +50 pips gain (+2.17% on equity)