The name of this trade comes from the triangular pattern made by the ships involved in this trade. Slavery of Africans and cheap labour provided by them made it very lucrative to the American and European merchants. Some African Americans even claim that it laid the foundation of American capitalism.

In the first part of this trade, ships from Europe traveled to Africa where enslaved Africans were bought by the traders in exchange for goods from Europe. The ships then sailed to America, thus forming the second part of the triangle. This used to be a horrific journey, and resulted in death for many Africans slaves. The survivors were then sold to the plantation owners. The third side of the triangle was formed when the ships returned to Europe laden with sugar, rum, tobacco and cotton. All of which had been produced by slave labor. This trade was legal till 1850.