Trading the Descending Triangle Pattern

Descending Triangle XOM Small
Descending Triangle
A bearish chart pattern used in technical analysis that is created by drawing one trend line that connects a series of lower highs and a second trend line that has historically proven to be a strong level of support. Traders watch for a move below support, as it suggests that downward momentum is building. Once the breakdown occurs, traders enter into short positions and aggressively push the price of the asset lower. The chart below is an example of a descending triangle:

This is a very popular tool among traders because it clearly shows that the demand for an asset is weakening, and when the price breaks below the lower support, it is a clear indication that downside momentum is likely to continue or become stronger. Descending triangles give technical traders the opportunity to make substantial profits over a brief period of time. The most common price targets are generally set to equal the entry price minus the vertical height between the two trend lines.

A descending triangle is the bearish counterpart of an ascending triangle.
About Cousin Vinny
Cousin Vinny is the internet pseudonym for TLLeBlanc, Architect who started trading in 1987. Practicing Architecture for over 30 years, Mr. LeBlanc found the technical aspects of building, design and construction prepared him well for fundamental and technical analysis.

He is a family man, a native of New Orleans, currently residing in New Jersey.
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Mission
We have a simple mission. We wish to make profitable trading and investing a core part of every "newbie" trader.

Knowledge is power and with trading, being able to act quickly, with forethought is a critical component to success.

We wish to educate new traders in the process of recognizing and executing high probability setups, entries and exits.