Draw the lower horizontal line with at least two failed attempts to break the support level.Identify price consolidation during a bearish trend.To sum up, here are the steps you need to take in order to identify and trade the descending triangle candlestick pattern. A trader will, therefore, enter a position after the breakout with a stop loss at the highest level of the last price swing inside the triangle. Then, when the breakout occurs, the pattern is confirmed and the bearish trend continues. However, at some point during the trend, prices have consolidated, creating descending highs and a lower support trend line. Finally, once you have identified the pattern, you’ll be waiting for the breakout to occur, which signals the trend is strengthening.Īs you can see in the GBP/JPY 5-minute chart below, the market is in a downward trend. To do so, many traders use the descending channel pattern to get a better indication of the market’s trend. Secondly, you need to find a trend line with lower highs and a lower trend line support level – those creating a shape of a triangle. First, the descending triangle appears at the end of a bearish rally when the price consolidates before making another move. Generally, it’s fairly easy to recognize. How do You Identify and Use the Descending Triangle Candlestick Pattern?

And much like nearly all candlestick patterns, traders usually enter a position when the price breaks below the support line, which signals that the trend may continue.īasically, it comprises a bearish move, a brief consolidation, and a continuation to the bearish. The pattern has the following characteristics – a horizontal lower trend line that acts as a support level and a descending trend line with lower highs that acts as an upper trend line resistance. Much like its opposite version, the ascending triangle pattern (which is a bullish continuation pattern), the descending triangle pattern works as a continuation bearish pattern and helps traders find entry and exit points during a downward trend. The pattern forms during a downtrend and indicates that the existing trend is likely to continue. What is the Descending Triangle Candlestick Pattern?Ī descending triangle is a bearish chart formation. What are the descending triangle candlestick pattern pros and cons?.What’s the difference between the descending triangle chart pattern and the falling wedge pattern?.How do you trade the Descending Triangle Candlestick Pattern?.How do you identify and use the Descending Triangle Candlestick Pattern?.

Falling wedge vs descending triangle