How to Draw Descending Triangle Perfectly

The descending triangle is the opposite of the ascending triangle and is considered a bearish pattern. It is characterized by a descending upper line and a flat lower line, indicating that sellers are more aggressive than buyers. This pattern is usually resolved on the downside, with a decisive close under the lower trendline, usually on increased volume. The downside signal is registered by a decisive close under the lower trendline, usually on increased volume.

The measurement technique for the descending triangle is the same as the ascending triangle, where the analyst must measure the height of the pattern at the base to the left and then project that distance down from the breakdown point. Sometimes, after the pattern is resolved, a return move occurs and it should encounter resistance at the lower trendline.

The Descending Triangle as a Top

The descending triangle is typically considered a continuation pattern that occurs within downtrends. However, it can also appear at market tops, in which case it signals a major trend reversal to the downside. This can be recognized by a close below the flat lower line. It is not unusual for this type of pattern to appear in a top setting, and it should be noted that the descending triangle can signal a trend reversal.
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