Early this afternoon the Russel 2k set up a textbook Ascending Triangle pattern, so I thought I’d highlight it for those of you who aren’t currently using this kind of play in your arsenal.

The first thing you’ll notice is a very definite uptrend that had been in place all morning. 6 attempts to approach the TL+ showed that it was very entrenched.

From 10:30 to 12:30 E.S.T. the 610t chart started a very obvious ascending triangle pattern with volume drying up significantly. TRIX Divergences failed to have any follow through to the downside with prices pushing closer and closer to the 686.00 mark. So I drew a horizonal line at 686.80 with an audio alert and went to lunch.

Not much later, the alert sounded and I came back to my computer to wait and see whether the candle would be able to close above 686.00. When it did at A I then went long at the market when the following candle broke the prior candle’s high at around 686.40.

From there you have options as to how you wish to manage the trade, but it showed a profit right from the beginning and never looked back. I drew a new rising trendline and exited when price managed to close below it at B. Another thing you could have done is wait for a TRIX Hook down (When it switches from Green to Red). Both of these signals occured right about the same time, so I gladly locked in a 2.5 point profit at around 689.00.

This kind of setup is very low risk for after initiating the trade you can place a stop under the original rising trendline, & if that breaks, then it is most likely a great time to reverse and go short. But either way its going to be hard to find a much better Risk to Reward setup than this.