Descending Triangle

Identification Criteria

• A horizontal support line connects at least two roughly equal lows.
• A falling trendline connects at least two successively lower highs.
• The two lines converge, narrowing the trading range as the pattern matures.
• Requires a minimum of four touch points (two on each line) to be considered well-formed.
• Volume typically contracts as the triangle narrows, then expands on the breakdown.

Formation Logic

The flat bottom shows that a specific price level is acting as a firm demand floor. The falling highs show that sellers are willing to accept progressively lower prices each time price rallies, rather than waiting for the previous high. This combination — steady support against increasingly eager sellers — is read as distribution that typically resolves downward.

Breakout / Confirmation Rule

Confirmation requires a decisive close below the horizontal support line, ideally with a volume increase. A close back above the most recent lower high after a breakdown attempt should be treated as a failed signal.

Measured-Move Price Target

A commonly used, purely illustrative measured-move technique: measure the height of the triangle at its widest point (the vertical distance between the first low and the first high), then project that distance below the breakdown point.

Common Pitfalls

• A triangle that is too flat on both sides is better classified as a rectangle, not a descending triangle.
• Late-stage breakdowns near the apex tend to be lower-conviction and more prone to whipsaw.
• Descending triangles can also break upward; the bearish bias is a tendency observed in practice, not a certainty.