A Descending Triangle pattern in Forex trading is a bearish continuation chart pattern that typically forms during a downtrend, indicating the potential for the trend to continue. Here's a breakdown:
📉 What Is a Descending Triangle?
It is formed when:
Support (horizontal line) is repeatedly tested but not broken.
Lower highs are formed, creating a descending trendline above.
The triangle shape comes from the descending trendline (resistance) and the flat support line.
📊 Structure of the Pattern:
Upper Trendline: Sloping down, connecting lower highs.
Lower Support Line: Flat, connecting equal lows.
Price gets squeezed between the two lines until it breaks out — usually downward.
🔍 How to Trade It:
✅ Entry:
Enter a sell trade when the price breaks below the support level with strong volume.
🛑 Stop Loss:
Just above the last lower high or above the descending trendline.
🎯 Take Profit:
Measure the height of the triangle and project it downward from the breakout point.
🧠 Tip:
While it’s a bearish pattern, false breakouts can happen. Wait for confirmation:
Retest of broken support (now resistance)
Increase in volume at breakout
📌 Example Use:
If XAUUSD is forming a descending triangle at $2,320 support with lower highs (e.g., $2,340 → $2,330 → $2,325), a break below $2,320 with high volume might signal a sell opportunity.
📉 What Is a Descending Triangle?
It is formed when:
Support (horizontal line) is repeatedly tested but not broken.
Lower highs are formed, creating a descending trendline above.
The triangle shape comes from the descending trendline (resistance) and the flat support line.
📊 Structure of the Pattern:
Upper Trendline: Sloping down, connecting lower highs.
Lower Support Line: Flat, connecting equal lows.
Price gets squeezed between the two lines until it breaks out — usually downward.
🔍 How to Trade It:
✅ Entry:
Enter a sell trade when the price breaks below the support level with strong volume.
🛑 Stop Loss:
Just above the last lower high or above the descending trendline.
🎯 Take Profit:
Measure the height of the triangle and project it downward from the breakout point.
🧠 Tip:
While it’s a bearish pattern, false breakouts can happen. Wait for confirmation:
Retest of broken support (now resistance)
Increase in volume at breakout
📌 Example Use:
If XAUUSD is forming a descending triangle at $2,320 support with lower highs (e.g., $2,340 → $2,330 → $2,325), a break below $2,320 with high volume might signal a sell opportunity.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
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Join our trusted trading team with real-time insights and expert support.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.