Downtrend: The market must be in a downtrend before the descending triangle pattern appears.
This is important and emphasises that traders should not simply trade the pattern whenever the descending triangle appears.
Consolidation: The descending triangle then appears while the market enters the consolidation phase.
Upper trendline: While the market is consolidating, a downward sloping trendline can be drawn by connecting the highs.
This downward sloping trendline shows that sellers are slowly pulling the price down
Lower trendline: The lower trendline acts as support. Price often approaches this level and bounces off until the breakout eventually occurs.
Trend continuation: After price posts a strong break below the lower trendline, traders will look for confirmation of the pattern via continued downward momentum.
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