Descending Triangle Pattern
Learn to recognize and trade a descending triangle pattern through interactive charts.
What is a descending triangle pattern?
A descending triangle is a consolidation pattern in a downtrend. It points to distribution as investors sell earlier and earlier into rallies.
Download our free chart patterns PDF for a guide to 20 classical chart patterns with over 100 interactive charts, also on TradingView.
This pattern usually lasts between 1 and 3 months, but can unfold over longer periods of time.
A descending triangle looks like a right-angle triangle.
- This pattern is a consolidation in a downtrend. Look for falling moving averages in the weeks and months preceding the pattern. However, the strength of the downtrend is less important than the soundness of the pattern itself.
- This pattern consists of a support line running through 2 or more recent lows, and of a downward-sloping trendline running through 2 or more lower highs.
- It's important that the highs fall over time, as this points to sustained selling pressure. The pattern won't be valid otherwise.
Trading volumes usually fall as the pattern takes shape.
Descending triangle trading tips
Look for a break below the support line running through recent lows. Some traders wait for a successful retest of that line before opening a short position. It’s preferable, but not essential, that the breakout happens on higher volume.
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About the author
I'm Stéphane, a trader and an entrepreneur. My mission with TrustedBrokers is to help you find the right broker for you, whether you're a beginner or a pro. I've personally used and tested the brokers on our service, opening and funding real-money accounts, contacting customer service and placing trades. I started my career in investment banking in London.