Descending Triangle:

• Structure: It is formed by a horizontal support line at the bottom and a descending resistance line at the top, creating a triangle shape.
• Bullish Signal (in bullish context): While traditionally seen as a bearish continuation pattern, in bullish markets it can signal accumulation — buyers absorbing selling pressure until a breakout occurs.
• Breakout Point: The bullish confirmation comes when the price breaks above the descending resistance line with strong volume.
• Psychology: It reflects sellers pushing prices lower but failing to break support, while buyers gradually gain strength.

The Descending Triangle is part of classical chart patterns studied since the early 20th century.

The pattern was documented and analyzed by Richard W. Schabacker

One of the earliest pioneers of technical analysis

They formalized triangle patterns including descending triangles

Helped popularize triangle patterns in modern trading

The Descending Triangle evolved naturally from repeated observations of lower highs with strong support, rather than being invented by one person.

Used price consolidation and breakdown strategies similar to triangle patterns

Focused on consolidation ranges and breakout/breakdown trading

These traders applied similar logic: Lower highs + support → Breakdown → Strong downward move

Important Reality: There is no publicly available data showing exact investment amounts or profits specifically from Descending Triangle trades. This pattern is always used as part of a broader strategy.

Primarily an analyst and author

No disclosed trading capital or profits

Contribution: theoretical foundation of chart patterns

One of the most famous traders in history

Made and lost millions of dollars multiple times

Used breakdown and trend-following strategies aligned with this pattern

Turned $10,000 into $2 million

Used breakout strategies (conceptually similar to triangle breakouts/breakdowns)

Focused on teaching and analysis

Did not publish specific trade profit data

Descending Triangle is typically a bearish continuation pattern

Represents:

• Sellers becoming stronger (lower highs)
• Buyers holding support (temporarily)

Best confirmation signals:

• Breakdown below support
• Volume increase during breakdown

• Traders’ Success: Many traders have profited by recognizing descending triangles as consolidation zones that can break either way depending on market context.
• Institutions & Individuals: It became a staple in technical analysis, used to identify breakout opportunities.
• Profit Potential: In bullish markets, an upside breakout often leads to sharp rallies, rewarding patient traders.

• Versatility: Though often bearish, it can also signal bullish continuation depending on trend context.
• Simplicity: Easy to spot visually — just a flat support line and a descending resistance line.
• Educational Spread: Featured in nearly every technical analysis textbook and trading course.
• Market Psychology: It captures the struggle between sellers pressing lower highs and buyers defending support.
• Broad Application: Works across stocks, forex, commodities, and crypto, making it universally relevant.

• Key Idea: In bullish markets, signals continuation after consolidation.
• Origin: Documented by Schabacker and Edwards & Magee.
• Profitability: Yes, widely used to capture breakouts.
• Fame: Reliability, simplicity, and broad application made it a cornerstone of chart analysis.

Bullish Reversal / Bullish Continuation (rare scenario)

The Descending Triangle is traditionally a bearish continuation pattern, but in certain market conditions it can act as a bullish setup. It is defined by a horizontal support line and a descending resistance line. In bullish cases, buyers absorb selling pressure and eventually break above the descending resistance, signaling strength and continuation of an uptrend.

• Sellers attempt to push prices lower, forming descending highs.
• Buyers defend a strong support level, preventing breakdown.
• Over time, selling pressure weakens as buyers accumulate.
• A breakout above the descending resistance line confirms bullish momentum.

Research by Thomas Bulkowski notes that while descending triangles break downward most often, upward breakouts occur in 30–35% of cases, and when they do, they can be powerful bullish signals.

The projected move is typically equal to the pattern height (distance between the first high and the support line). Average gains range from 10–20% in bullish breakout scenarios.

• Strong prior uptrend or bullish sentiment
• Moderate volatility
• Momentum-driven environments with active buyer participation

• Versus Ascending Triangle: Ascending Triangle has rising support, while Descending Triangle has falling resistance.
• Versus Symmetrical Triangle: Descending Triangle has a flat support line, while symmetrical triangles have converging sloping boundaries.
• Versus Falling Wedge: Falling Wedge slopes both boundaries downward, while Descending Triangle has one flat side.

Typically forms after an uptrend or during consolidation phases.

• Initial bullish impulse sets the stage.
• Price consolidates between horizontal support and descending resistance.
• Sellers push lower highs, but buyers defend support.
• Breakout above descending resistance completes the bullish scenario.

Support is established at repeated lows where buyers consistently defend price.

Resistance forms through descending highs, reflecting weakening selling pressure.

• Draw a horizontal line across troughs (support).
• Draw a descending line across peaks (resistance).

• At least two touches on support and resistance.
• Clear descending slope on resistance line.
• Consolidation phase lasting several sessions or weeks.

• Volume contracts during consolidation.
• Breakout is accompanied by volume expansion.

Occurs when price closes above the descending resistance line.

• Strong bullish body
• Close above resistance
• Preferably accompanied by high volume

• Daily close above resistance
• Volume spike
• Follow-through in subsequent sessions

Expansion confirms strong buying interest and validates breakout reliability.

Breakout signals bullish continuation or reversal depending on prior trend.

Aggressive Entry: Enter immediately after breakout confirmation.

Conservative Entry: Wait for retest of breakout level (resistance becomes support).

Bullish Breakout: Below support or retest low

Entry Price = 95

Resistance Level = 100

Support Level = 90

Pattern Height = 10

Target Price = 105

Stop Loss = 92

• Volume contracts during triangle formation.
• Expansion at breakout confirms strength.
• Weak volume breakouts may indicate false signals.
• Sustained volume growth after breakout improves reliability.

• Horizontal support line at the bottom.
• Descending resistance line at the top.
• Multiple touches on both boundaries.
• Consolidation phase before breakout.

• Frequently seen on hourly and 4-hour charts for short-term setups.
• On daily charts, bullish descending triangles often appear during consolidation phases in strong uptrends.
• On weekly charts, they can mark accumulation zones before major bullish moves.

The pattern signals weakening selling pressure and potential bullish breakout.

Strong prior uptrend, contracting volume, and decisive breakout candle.

• False breakout with weak volume.
• Opposite breakout below support line.
• Early warning: support line weakens with deeper lows.
• Invalidation if breakout fails to sustain above resistance.
• Risk management: avoid trading in sideways markets where triangles often fail.

• Entering too early before breakout confirmation.
• Misidentifying descending triangles as falling wedges.
• Ignoring volume contraction and expansion signals.
• Placing stop-loss too tight near support.
• Assuming bullish breakout is guaranteed despite bearish bias of the pattern.

The Descending Triangle in bullish scenario begins with an uptrend. Price consolidates between a horizontal support line and a descending resistance line. Each peak is lower than the previous one, while support remains firm. Volume contracts during consolidation. A breakout candle closes above the descending resistance line with strong volume. Traders project the target by adding the pattern height to the breakout level. Volume expansion confirms the breakout’s reliability.