Triangle Pattern (Descending)

14 min read

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 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 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 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: #

Clear horizontal support with 2+ touches
Well-defined descending resistance with 3+ touches
Declining volume during formation
Volume spike on breakdown (2-3x average)
Pattern forms within broader downtrend
Duration between 3-12 weeks
Clean geometric structure
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.

Bearish Signals, High Reliability