Descending Triangle
A descending triangle is a bearish continuation pattern in technical analysis that is used to analyze and forecast potential price movements of financial instruments. The descending triangle pattern is formed by connecting a series of lower highs with a horizontal support line. It suggests that the price is likely to continue its downward trend after the pattern is completed. Here are the main components of a descending triangle pattern: Lower Highs: The pattern starts with a series of lower highs, where each subsequent peak is lower than the previous one. This indicates that sellers are consistently entering the market at lower prices, showing a weakening of buying interest. Horizontal Support Line: A horizontal support line is drawn connecting the lower lows of the price, forming the lower boundary of the triangle. This line represents a level where buying pressure has previously halted the price decline. Descending Trendline: A descending trendline is drawn connecting the lower highs. This line serves as the upper boundary of the triangle and shows the downward momentum of the pattern.
Related Terms
- Equities
- Volume
- Uptrend
- Support
- Risk-Reward Ratio
- Reversal
- Retracement
- Resistance
- Relative Strength Index (RSI)
- Price Action
- Position Sizing
- Overbought
- Moving Average Convergence Divergence (MACD)
- Oversold
- On Balance Volume (OBV)
- Equities
- Volume
- Uptrend
- Support
- Risk-Reward Ratio
- Reversal
- Retracement
- Resistance
- Relative Strength Index (RSI)
- Price Action
- Position Sizing
- Overbought
- Moving Average Convergence Divergence (MACD)
- Oversold
- On Balance Volume (OBV)
- Trendline
- Mean Reversion
- Moving Average (MA)
- Inverse Heads & Shoulders
- Heads & Shoulders
- Flag
- Drawdown
- Downtrend
- Double Top
- Double Bottom
- Distribution
- Cup & Handle
- Consolidation
- Candlestick
- Breakout
- Breakdown
- Bollinger Bands
- Bearish Divergence
- Bullish Divergence
- Backtesting
- Ascending Triangle
- Accumulation
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- Options expiry
- Adjusted distributed income
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- Federal funds rate
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- Buyback
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- Yield Pickup
- Subordinated Debt
- Trailing Stops
- Treasury Stock Method
- Stochastic Oscillator
- Bullet Bonds
- Basket Trade
- Contrarian Strategy
- Exchange Control
- Notional Value
- Relevant Cost
- Dow Theory
- Speculation
- Stub
- Trading Volume
- Going Long
- Pink sheet stocks
- Rand cost averaging
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- Stop-limit sell order
- Economic Bubble
- Ask Price
- Constant prepayment rate
- Covenants
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