Technical Glossary / Chart Patterns
Descending Triangle
A flat floor and a falling series of highs, usually traded on a break of the floor.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A descending triangle has horizontal support and lower highs. Sellers are accepting lower prices, while buyers defend one price. The classic reading is bearish, completed by a close through the floor.
How to identify it
Two or more similar lows and a series of lower highs. The floor is one price area. The highs step down toward it.
Bullish reading
A close above the descending resistance line fails the bearish reading and can be a squeeze, because shorts are leaning on an obvious floor.
Bearish reading
A close under the floor is the short trigger. Risk goes above the last lower high. The triangle height subtracted from the break is the common measured move.
Common mistakes
Shorting inside the triangle because the textbook says descending triangles break down.
Limitations
Obvious floors attract stops just underneath, so the first break can be a stab that snaps back. Wait for a close, and know where you are wrong.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.