Triangle Pattern (Descending)

Signal: Bearish | Reliability: High | Volume Confirmation: Required | Market Conditions: Works best in trending markets

Descending Triangle is one of the most reliable and recognizable continuation chart patterns in technical analysis. This bearish formation signals the potential continuation of a downtrend through the creation of a flat support line and a descending resistance line, demonstrating persistent selling pressure and eventual breakdown potential. The pattern’s clear structure makes it accessible to beginners while its high success rate ensures it remains a cornerstone strategy for experienced traders seeking to capitalize on momentum continuation and support level failures.

What is Descending Triangle? #

Descending Triangle is a bearish continuation pattern that forms when price creates a series of lower highs while repeatedly testing the same support level, indicating distribution and increasing selling pressure that typically leads to a downward breakdown. The pattern consists of a horizontal support line at the bottom and a descending trendline at the top, creating a triangular formation that narrows over time. When price breaks below the support level with volume confirmation, it signals a likely continuation of the previous downtrend.

The pattern represents a gradual shift in market dynamics where sellers become increasingly aggressive while buyers show diminishing conviction at the support level. Each test of resistance at progressively lower levels demonstrates growing supply, while the repeated tests of support suggest that once this level is breached, there will be limited buying support below. The beauty of Descending Triangle lies in its predictability—the breakdown direction is anticipated, and the pattern provides clear entry signals and measured move targets.

Key Uses: #

• Trend Continuation Confirmation: Signal the continuation of downtrends with high reliability
• Support Level Analysis: Identify key support through multiple tests and eventual break
• Entry/Exit Timing: Clear breakdown signals for optimal trade execution
• Risk Management: Natural stop-loss

  Stop-Loss

  A stop-loss is an order placed with a broker to automatically sell a security when it reaches a predetermined price. This tool is designed to limit an investor's potential loss on a position.

  For example, if you buy a stock at $50 and set a stop-loss at $45, your broker will automatically place a sell order if the stock's price falls to or below $45. This helps to protect you from further losses in a declining market. It is a fundamental risk management tool for traders and investors. 

  placement above descending resistance line
• Target Calculation: Reliable measurement for profit objectives using pattern height
• Distribution Identification: Recognize institutional selling and smart money distribution

Descending Triangle Anatomy #

Pattern Components: #

Horizontal Support Line (Bottom):

• Flat line connecting two or more swing lows
• Acts as key psychological support level
• Usually coincides with round numbers or previous significant levels
• Becomes resistance after successful breakdown

Descending Resistance Line (Top):

• Downward-sloping trendline connecting lower highs
• Demonstrates increasing selling pressure and supply
• Shows sellers willing to accept lower prices over time
• Indicates reduced buying pressure at higher levels

Convergence Point:

• Where support and resistance lines would theoretically meet
• Creates time pressure for resolution
• Breakdown typically occurs at 50-75% of pattern completion
• Represents point of maximum compression

Breakdown Point:

• Decisive move below horizontal support
• Should be accompanied by volume expansion
• Often occurs with gap or strong momentum candle
• Triggers measured move to downside targets

Volume Pattern: #

• Pattern Formation: Generally declining volume as pattern develops
• Resistance Tests: Decreasing volume on bounces from descending resistance
• Support Tests: Moderate volume on tests of horizontal support
• Breakdown: Significant volume spike (2-3x average) confirms validity

Pattern Psychology: #

Early Formation: #

• Initial support established from previous low or significant level
• Bears test support but fail to break through initially
• Buying pressure emerges at support, causing bounce
• Sets stage for distribution phase

Descending Resistance Development: #

• Each bounce finds resistance at progressively lower levels
• Demonstrates institutional distribution and smart money selling
• Bears become more confident and aggressive with each test
• Buyers become less willing to purchase shares at higher prices

Support Retests: #

• Multiple attempts to break support show persistent supply
• Each failed breakdown followed by weaker bounce
• Volume typically decreases with each test (buyer exhaustion)
• Resistance line continues to fall, creating downward pressure

Breakdown Dynamics: #

• Final support test occurs with explosive volume
• Buyers who have been defending level finally overwhelmed
• Long liquidation and new selling creates momentum
• Pattern completion triggers technical selling and stop-loss

  Stop-Loss

  A stop-loss is an order placed with a broker to automatically sell a security when it reaches a predetermined price. This tool is designed to limit an investor's potential loss on a position.

  For example, if you buy a stock at $50 and set a stop-loss at $45, your broker will automatically place a sell order if the stock's price falls to or below $45. This helps to protect you from further losses in a declining market. It is a fundamental risk management tool for traders and investors. 

  orders

Types of Descending Triangle Patterns #

1. Classic Descending Triangle #

Characteristics:

• Clear horizontal support line with 2+ touch points
• Well-defined descending resistance line with 3+ touch points
• Pattern duration of 4-12 weeks for optimal reliability
• Volume declining throughout formation phase

Identification Rules:

• Support level should be tested at least twice
• Each high should be progressively lower
• Pattern should span minimum 3-4 weeks
• Volume confirms distribution pattern

2. Descending Triangle with False Breakdown #

Characteristics:

• Initial breakdown below support fails and reverses
• Price returns to pattern and continues formation
• Creates liquidity grab before true breakdown
• Often more powerful when genuine break occurs

Key Points:

• False breakdown should be on lower volume
• Return to pattern area confirms continuation
• Second breakdown attempt usually successful
• Creates excellent risk-reward opportunities for patient traders

3. Right-Angled Descending Triangle #

Characteristics:

• Perfect horizontal support line
• Exact 90-degree angle at support level
• Clean descending resistance without deviation
• Textbook formation with clear geometric structure

Analysis:

• Higher reliability due to clear structure
• Easier to identify and trade
• Often forms at major psychological levels
• Institutional favorite for distribution

4. Descending Triangle with Slight Slope #

Characteristics:

• Support line has slight upward or downward angle
• Still maintains overall descending triangle structure
• More common in real market conditions
• Requires flexible interpretation

Components:

• Slight Downward Slope: Even more bearish than horizontal support
• Slight Upward Slope: Still valid if resistance line falls faster
• Tolerance Level: Up to 15-degree variance acceptable
• Volume Pattern: More important than perfect geometry

Trading Strategies #

1. Support Breakdown Strategy #

Setup: Trade the break below horizontal support

Entry Rules:

• Wait for decisive close below support level
• Volume should be 2-3x average on breakdown day
• Enter short on break or slight pullback to support

Stop Loss Placement:

• Above most recent swing high for conservative approach
• Above descending resistance line for aggressive traders
• Use 1-2% rule for position sizing based on account size

Profit Targets:

• Primary Target: Pattern height projected below breakdown point
• Secondary Target: Next significant support level
• Extended Target: 1.618 Fibonacci extension of pattern height

2. Resistance Line Rejection Strategy #

Setup: Enter during pattern formation on resistance rejections

Entry Criteria:

• Price approaches descending resistance line
• Strong reversal signal (shooting star, doji, etc.)
• Volume confirmation on rejection

Advantages:

• Multiple entry opportunities during formation
• Better risk-reward ratio with closer stops
• Allows accumulation of short position at better prices
• Can pyramid positions as pattern develops

Disadvantages:

• Pattern not confirmed until breakdown
• Risk of pattern failure and breakout
• Requires active management and monitoring

3. Pullback After Breakdown Strategy #

Setup: Enter on retest of broken support as resistance

Process:

• Wait for initial breakdown below support
• Price pulls back to test support as resistance
• Enter short on failed retest with volume

Benefits:

• Confirmation of pattern validity and resistance conversion
• Better entry price than chasing initial break
• Natural stop-loss

  Stop-Loss

  A stop-loss is an order placed with a broker to automatically sell a security when it reaches a predetermined price. This tool is designed to limit an investor's potential loss on a position.

  For example, if you buy a stock at $50 and set a stop-loss at $45, your broker will automatically place a sell order if the stock's price falls to or below $45. This helps to protect you from further losses in a declining market. It is a fundamental risk management tool for traders and investors. 

  above broken support level
• Higher probability setup with clear risk parameters

4. Anticipation Strategy (Advanced) #

Setup: Enter just before anticipated breakdown

Timing Requirements:

• Pattern near completion (70-80% to apex)
• Strong volume distribution visible
• Price coiling near support level

Entry Rules:

• Enter on strong rejection from resistance near pattern end
• Use tight stops above recent resistance
• Scale into position as breakdown approaches
• Exit if pattern extends beyond normal timeframe

Volume Analysis in Descending Triangle #

Volume Pattern Significance #

Formation Phase Volume:

• Should generally decline as pattern develops
• Shows consolidation and equilibrium between buyers/sellers
• Lower volume on resistance tests indicates buyer exhaustion
• Steady volume on support tests shows selling interest

Distribution Evidence:

• Volume spikes on resistance line rejections
• Decreasing volume on support bounces
• On-balance volume should trend downward throughout pattern
• Volume-price trend should show distribution characteristics

Breakdown Volume Requirements #

Confirmation Criteria:

• Volume should be 2-3x the 20-day average
• Should be highest volume day in pattern formation
• Sustained volume in days following breakdown
• Volume should exceed any volume spikes during formation

Volume Analysis Tools:

• Volume Moving Average: Compare breakdown volume to average
• Volume Rate of Change: Measure expansion percentage
• Accumulation/Distribution Line: Should trend downward
• On-Balance Volume: Should make new lows on breakdown

Combining Descending Triangle with Other Analysis #

Descending Triangle + Support/Resistance Levels #

Level Confluence:

• Pattern support often coincides with major support levels
• Previous lows provide additional support confirmation
• Round numbers frequently act as support in pattern
• Multiple timeframe support adds significance

Enhanced Targeting:

• Use major support levels below pattern for extended targets
• Previous breakdown levels provide intermediate objectives
• Fibonacci levels offer additional target zones
• Gap fills may provide support levels to monitor

Descending Triangle + Moving Averages #

Trend Context:

• Pattern should form below major moving averages (50, 200-day)
• Descending resistance often aligns with moving average resistance
• Moving averages provide dynamic resistance during formation
• MA breaks often coincide with pattern failures

Signal Enhancement:

• Pattern below all major MAs shows strong trend context
• Moving average convergence adds to pattern significance
• Price staying below MAs during formation bearish confirmation
• MA fans provide additional resistance levels for entries

Descending Triangle + Momentum Indicators #

RSI Analysis:

• RSI should show lower highs during pattern formation
• Overbought bounces should become less overbought over time
• RSI divergence during formation can signal weakness
• RSI below 50 on breakdown confirms momentum

MACD Confirmation:

• MACD histogram should show deteriorating momentum
• Bearish crossover often coincides with breakdown
• MACD line should make lower highs during formation
• Signal line divergence indicates momentum building

Descending Triangle + Fibonacci Analysis #

Retracement Levels:

• Resistance bounces often occur at key Fibonacci levels
• 38.2% and 50% retracement levels common resistance areas
• Golden ratio relationships enhance pattern validity
• Time-based Fibonacci can predict breakdown timing

Extension Levels:

• 1.272 and 1.618 extensions provide extended targets
• Fibonacci fans offer dynamic support levels
• Price projections using cluster analysis
• Time extensions help predict pattern completion timing

Market Context Analysis #

Bear Market Descending Triangles #

Characteristics:

• Extremely reliable continuation patterns
• Often lead to explosive breakdown moves
• May form at consolidation levels within larger downtrends
• High participation and volume on breakdowns

Trading Approach:

• Use larger position sizes due to higher reliability
• Target extended moves beyond measured objectives
• Consider market leadership and sector rotation
• Watch for gap breakdowns and momentum continuation

Bull Market Descending Triangles #

Characteristics:

• Less common but can signal counter-trend declines
• Often shorter duration and smaller measured moves
• May be part of bull market correction structure
• Require stronger volume confirmation for validity

Trading Approach:

• Use smaller position sizes due to trend context
• Take profits quickly at measured move targets
• Watch for failure and resumption of uptrend
• Consider broader market context and support levels

Sideways Market Descending Triangles #

Characteristics:

• Form within larger trading range structures
• Breakdown may lead to range breakdown or continuation
• Often provide best risk-reward opportunities
• May signal end of consolidation phase

Trading Approach:

• Use range context for additional targets
• Monitor for range breakdown potential
• Take profits at range support levels
• Watch for false breakdowns and range continuation

Advanced Descending Triangle Techniques #

Multiple Timeframe Analysis #

Strategy: Confirm pattern across multiple timeframes

Higher Timeframe: Overall trend context and major levels Pattern Timeframe: Main pattern identification and structure Lower Timeframe: Precise entry timing and volume analysis

Example Setup:

• Weekly: Major downtrend with consolidation
• Daily: Descending triangle formation
• 4-Hour: Entry timing on resistance rejections
• 1-Hour: Volume confirmation and breakdown signals

Descending Triangle Variations #

Micro Patterns:

• Small triangles within larger formations
• Fractal nature of pattern across timeframes
• Multiple triangles in sequence
• Complex distribution structures

Extended Patterns:

• Patterns lasting 3+ months
• Multiple support tests (5+)
• Broader institutional distribution
• Often precede major breakdown moves

Failed Pattern Recognition #

Failure Signals:

• Breakout above descending resistance line on high volume
• Multiple false breakdowns without follow-through
• Volume divergence during formation phase
• Broader market improvement

Trading Failed Patterns:

• Enter long on confirmed breakout
• Target measured move above resistance line
• Often leads to sharp reversal moves
• Can signal end of downtrend

Descending Triangle Measured Moves #

Standard Calculation:

• Measure vertical height of pattern (top to support)
• Project equal distance below breakdown point
• Provides minimum target for pattern completion
• Success rate approximately 70-80%

Enhanced Calculations:

• Use multiple Fibonacci extensions for additional targets
• Consider prior support levels for realistic objectives
• Factor in broader market context for extended moves
• Use volume analysis to gauge potential move strength

Common Descending Triangle Mistakes #

Mistake 1: Premature Pattern Recognition #

Problem: Identifying pattern before sufficient touch points Solution: Wait for minimum 2 support tests and 3 resistance touches

Mistake 2: Ignoring Volume Requirements #

Problem: Trading breakdowns without volume confirmation Solution: Always verify 2-3x volume expansion on breakdown

Mistake 3: Poor Entry Timing #

Problem: Chasing breakdowns or entering too early in formation Solution: Use systematic entry rules and wait for confirmation

Mistake 4: Inadequate Risk Management #

Problem: Not using proper stop-loss

levels or position sizing Solution: Always place stops above resistance line, limit risk to 2%

Mistake 5: Unrealistic Expectations #

Problem: Expecting immediate results or oversized moves Solution: Use measured move calculations and be patient

Mistake 6: Ignoring Market Context #

Problem: Trading patterns against major trend or market conditions Solution: Consider broader market environment and trend strength

Descending Triangle Timeframe Guidelines #

Timeframe	Pattern Duration	Reliability	Target Distance	Best For
Intraday	2-6 hours	Moderate	0.5-2%	Day trading
Daily	3-8 weeks	High	2-8%	Swing trading
Weekly	2-6 months	Very High	8-20%	Position trading
Monthly	6 months-1 year	Extremely High	15%+	Long-term investing

Pattern Optimization #

Reliability Factors: #

• Volume Confirmation: Essential for breakdown validity
• Pattern Duration: 4-12 weeks optimal for daily charts
• Number of Touch Points: More touches increase reliability
• Market Context: Stronger in established downtrends
• Support Significance: Major levels provide better patterns

Quality Checklist: #

1. Clear horizontal support with 2+ touches
2. Well-defined descending resistance with 3+ touches
3. Declining volume during formation
4. Volume spike on breakdown (2-3x average)
5. Pattern forms within broader downtrend
6. Duration between 3-12 weeks
7. Clean geometric structure
8. Support at significant technical level

FAQs #

How reliable is the Descending Triangle pattern?

Descending Triangle patterns have approximately 75-80% success rate when properly identified with volume confirmation and formed within downtrends. Reliability increases significantly when the pattern forms at major resistance levels and shows clear distribution characteristics.

What’s the difference between Descending and Ascending Triangles?

Descending Triangle is bearish with flat support and falling resistance, while Ascending Triangle is bullish with flat resistance and rising support. The volume and psychology patterns are opposite, with distribution in Descending and accumulation in Ascending triangles.

How do you calculate Descending Triangle price targets?

Measure the vertical distance from the top of the triangle to the support line, then project that same distance downward from the breakdown point. This gives the minimum measured move target. Additional targets include previous support levels and Fibonacci extensions.

Can Descending Triangle patterns fail?

Yes, approximately 20-25% of Descending Triangle patterns fail when price breaks out above the descending resistance line. Failed patterns often lead to sharp reversal moves and can signal the end of the downtrend.

What volume pattern confirms a Descending Triangle?

Volume should generally decline during pattern formation, showing consolidation. The breakdown should occur on volume that is 2-3x the recent average, with sustained volume in subsequent sessions to confirm the move.

How long should a Descending Triangle take to form?

For daily charts, reliable patterns typically take 4-12 weeks to complete. Shorter patterns (under 3 weeks) have lower reliability, while longer patterns (3+ months) tend to be more significant institutional distribution patterns.

What’s the best entry point for Descending Triangle patterns?

The most conservative entry is on a decisive close below support with volume confirmation. Active traders might enter on rejections from the descending resistance line, while patient traders wait for a pullback to test broken support as resistance.

Tips for Success #

• Wait for Confirmation: Never anticipate breakdowns; wait for volume-confirmed breaks
• Volume is Critical: Always confirm patterns with proper volume analysis
• Trend Context Matters: Strongest patterns form within established downtrends
• Patience with Formation: Allow patterns to fully develop before taking action
• Proper Risk Management: Use stops above descending resistance, limit risk to 1-2%
• Realistic Targets: Use measured move rules and technical support levels
• Watch for Failures: Be prepared to reverse if support holds convincingly
• Multiple Timeframes: Check higher timeframes for trend context
• Practice Recognition: Study historical examples to improve identification skills
• Stay Disciplined: Stick to entry and exit rules regardless of emotions

Conclusion #

Descending Triangle stands as one of the most reliable and profitable continuation patterns in technical analysis, offering traders clear entry signals with favorable risk-reward ratios. Its bearish bias and high success rate make it particularly valuable for capitalizing on downtrend continuations and breakdown momentum. The pattern’s strength lies in its representation of institutional distribution and the gradual shift in supply-demand dynamics that typically leads to explosive downward moves.

The pattern’s geometric clarity should not overshadow the importance of understanding the underlying distribution process it represents. When Descending Triangles form within strong downtrends with proper volume characteristics, they often mark significant acceleration points that can lead to substantial percentage declines. Success requires patience to allow complete formation, discipline to wait for volume confirmation, and the wisdom to consider broader market context.

Mastering Descending Triangle patterns provides traders with a powerful tool for identifying high-probability continuation setups. By respecting the pattern’s formation requirements and maintaining strict risk management principles, traders can harness one of technical analysis’s most dependable patterns for consistent profit generation in trending markets.

Remember: Descending Triangle patterns represent institutional distribution and retail exhaustion at support levels. By understanding the distribution process and waiting for proper volume confirmation, traders can position themselves advantageously for trend continuation and capitalize on one of the market’s most reliable bearish formations.