Once that happens, traders will attempt to confirm the pattern through a continued downward movement and enter short positions to help drive the price even lower.
Ultimately, the price gains enough bearish momentum and breaks below the support. Meanwhile, the lower trendline serves as a support level, with prices frequently approaching this area and bouncing off it. This trend line indicates that sellers are driving the price down, suggesting that bearish sentiment is gaining momentum. During consolidation, a downward-inclined trend line can be drawn to connect the lower highs. Once bears take over, the descending triangle takes place as the market consolidates. This is critical since traders should avoid trading the pattern whenever it emerges. A descending triangle can be drawn by plotting one trend line that connects a number of lower highs and another horizontal trend line that links a series of lows at a horizontal level.įor a descending triangle to appear, the market must be in a downtrend.
