An invented price line: lows that stop at the same level while the highs between them fall, and then a drop through that level, outlined by a flat line under the lows, a falling line across the highs and the height of the triangle at its widest.
An invented chart, drawn to show the shape of a descending triangle. Not market data.
Also searched asdescending triangle chart pattern · falling triangle · flat bottom triangle · bearish triangle
How to recognise a descending triangle
- At least two lows at about the same price.
- At least two highs, each lower than the last.
- The swings get smaller as the lines approach each other.
- Textbooks place it most often within a fall.
What it is taken to mean
It is read as sellers becoming more willing while buyers stay at one price. Each bounce is sold sooner. Traders take a close below the flat line as the buyers at that level having been used up, and a close above the falling line the other way.
That is a reading, and no more. A pattern is a description of what a price did, not a forecast of what it will do. Textbooks file this one under “continuation shapes”, which is a habit of naming and not a rule the market keeps.
How it is conventionally measured
The textbook measure is the height of the triangle at its widest, taken down from the flat line. It is a convention, not a prediction.
What traders check
- How many times each line has been touched.
- Which line the price has closed beyond.
- Whether the flat line is also a level that mattered on a longer time frame.
Where people go wrong
- Assuming it must break downward.
- Reacting to a wick through support instead of a close.
- Fitting the falling line to whichever highs make the neatest triangle.
On a real chart
Textbook shapes are rare. A real chart is ambiguous: the peaks are uneven, the lines can be drawn two or three ways, and the same candles are a descending triangle to one reader and something else to another. Most shapes are also recognised only once they are finished, which is after the move they are said to announce has begun.
The picture on this page is invented. It was drawn by hand to show the shape as plainly as possible, with every awkward detail left out. It is not market data and it records nothing that happened.
Questions people ask
- Is a descending triangle bearish?
- It is classed as bearish, because the highs are falling against a fixed floor. That describes the drawing. The price can leave on either side.
- Can a descending triangle break upward?
- Yes. A close above the falling line of highs happens often enough that no careful description of the shape leaves it out.
- Does a descending triangle predict a fall?
- No. It describes what a price did while the shape formed. Published studies of chart patterns disagree about whether they tell anything about the next move, and the tidy examples in textbooks were chosen afterwards, when the outcome was known. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern described here says nothing certain about what a price will do next.