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The descending triangle is a mirror image of the ascending triangle. You can see in the graph below it has a flat lower line and a descending upper line. Generally considered a bearish continuation pattern, it indicates that sellers are more aggressive than buyers, and usually resolves on the downside. The downside signal is a decisive close under the lower, or flat, trendline and will most likely be on increased volume. Sometimes there will be a return move which should encounter resistance at the lower trendline.

The descending triangle is measured using the same technique as the ascending triangle. The height of the price pattern( point A to point B) is projected down from the breakdown point (C).

Although the descending triangle is a continuation pattern and usually found in downtrends, it can occasionally be found at market tops. It is fairly easy to pick out this pattern in an uptrend market top. In this case, a close below the flat bottom line indicates a major trend reversal to the the downside.

The volume, like in the ascending triangle, diminishes as the pattern forms and increases on breakout. The trader can see subtle changes in the volume which coincide with price action. The volume tends to be slightly heavier on the downside and lighter on the bounces.

The descending triangle, like other variations, is considered an intermediate pattern. This means the triangle will take between one and three months to form.

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