EURUSD 1.1856 USDJPY 111.62 USDCAD 1.2371 EURCZK 26.031 USDCZK 21.950 EURPLN 4.2725 USDPLN 3.6042
EURUSD 1.1856 USDJPY 111.62 USDCAD 1.2371 EURCZK 26.031 USDCZK 21.950 EURPLN 4.2725 USDPLN 3.6042

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Descending channels are useful for identifying downward trends and eventual deviations from these trends

Rule of thumb

As long as the market remains within the descending channel, it can be considered to be in a downward trend

 

In such circumstances potential support provided by the lower line is rather less reliable than the resistance line provided by the higher line

Chart type: Bar chart, candlestick

Applies to: Both reversal and continuation

Significance: High

 

A descending channel is a formation that combines the use of two parallel descending trendlines, showing that price is following a downward trend. Similarly, as in the case of a horizontal channel, these trendlines are treated as support and resistance lines.

 

descending, channel

 

The lower trendline (line of support) is drawn by connecting the lower-end of the bars/candles, while the higher trendline (line of resistance) is drawn by connecting the upper-end of the bars.

 

How to use it with MetaTrader 5:

  • Lines can be plotted using a “Draw trendline” icon
  • Another option is to choose “Insert/Object” and then the “Draw trendline” option.
  • A parallel line can be drawn by choosing a trendline on the chart with a double-mouse-click, and then moving the line with a mouse pointer while pressing the “Ctrl” button on the keyboard.

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