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An ascending channel is a bullish continuation chart pattern.
How do you recognise an ascending channel?
Several features help you identify it:
- An uptrend comes before the pattern
- Price moves between two parallel, upward-sloping trendlines that form a channel
- Support and resistance are tested repeatedly
- Price swings inside the channel until it breaks out
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Don't confuse an ascending channel with a bull flag, where the price consolidation is both short and downward-sloping.
How do you trade it?
The simplest strategy is to wait for a break above resistance.
Some traders look for a long entry at that point, with a stop-loss below the broken resistance or the most recent low.
You can set the take-profit by projecting the channel's height upwards from the breakout point.
Note: the ascending channel is the opposite of the descending channel, which follows the same logic in a downtrend.
