Descending Triangle - Bearish Continuation Pattern

Descending Triangle Definition

A descending triangle is a bearish chart formation. They can take place in both bull and bear markets, but often times they are a continuation pattern of an existing downtrend.

Technical Setup

• Two swing lows which are close in terms of price
• Two swing highs where each high is lower in terms of price
• Volume drops off during the formation of the descending triangle

Descending Triangle Price Target

To calculate the price target for a breakout of a descending triangle chart pattern, you take the difference of the highest and lowest price points in the formation, and you add this to the breakdown level.

Descending Triangle Charting Example

Notice how the price began to congest prior to the breakdown.

Descending Triangle