""What are Descending Triangles?

Just like the ascending triangle this is also a continuation chart pattern. The only difference is that it is a bearish continuation pattern and it is formed during the downtrend. Sometimes it can be also created at the end of an uptrend as a reversal pattern, but it is more commonly considered as a continuation chart pattern.

How to interpret this pattern?

Descending Triangles are opposite of Ascending Triangles. It is formed in the downtrend and indicates that the bears are aggressive. It has a falling upper line along the peaks and has a flat lower line along with the troughs. It signals the continuation of the downtrend with at least two or more peaks and two or more troughs. A close below the lower trend line with volume confirms the breakdown. Volume is usually low during the formation of the pattern.

Price target and Stop-loss:

The price target for this pattern should be set by subtracting the entry price and the vertical height between the two trend lines at the breakdown. One can set a stop loss at the upper trend line.

Descending triangle mostly appears in the downtrend and is considered a continuation pattern. They are very rarely found at the uptrend.

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Example:

Below is an example of a Descending Triangle formed on the daily chart :