How To Trade The Descending TriangleDraw line touching the lower highs which is the negative slope trend line. Draw horizontal level connecting equal highs. The horizontal level is a zero slope line.
Wait for a convincing close below the horizontal level.
This is a convincing close below the horizontal level. Draw the fib from the previous lower high touching the diagonal trend line. In this case, it is the the third lower high. The result is the 50% Fibonacci Retracement Level overlaps the Horizontal Level a little bit. That overlap is a confluence factor. Now wait for price to pull back to the 50% Retracement Level.
Price pulled back to the 50% Fibonacci Retracement Level, Horizontal Level, EMA 10 Level, and EMA 20 Level.
Set Measured Objective Target Using the Height of the Pattern.
Enter when the bear candles closes near 50% Fibonacci Retracement Level, Horizontal Level, EMA 10 Level, and EMA 20 Level. I would like to see a bearish price action signal at this level like a pin bar, rejection candlestick, or engulfing bar. This candlestick is not a engulfing bar on the 4H time frame, but it is still good enough for me to trade it. Price pulled back to the levels and produced a wick through the horizontal level. Price never closed above the horizontal level. If price closed above the horizontal level, then discard the trade idea.
