EURUSD 1.1773 USDJPY 112.15 USDCAD 1.2384 EURCZK 26.034 USDCZK 22.106 EURPLN 4.2865 USDPLN 3.6408
EURUSD 1.1773 USDJPY 112.15 USDCAD 1.2384 EURCZK 26.034 USDCZK 22.106 EURPLN 4.2865 USDPLN 3.6408

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A break-out from a descending triangle through a support line signals a continuation of a downward trend

Rule of thumb

A completed descending triangles formation confirms the continuation of  a downward trend

Chart type: Bar chart, candlestick

Applies to: Continuation

Significance: High

 

Descending triangles are outlined with a horizontal support line and a descending trendline, treated as the resistance line. A descending triangle is at its widest point  at the very beginning of the formation, and requires a previous downward trend to be properly formed.

 

descending triangle

 

For the descending triangle to be formed, at least two local highs - two touching points in the resistance line) and two local lows - two touching points in the support line - are required inside the triangle.

 

In general, an increasing volume as the triangle is forming represents a signal of the strength of the formation, a higher than usual volume is also considered to be a confirmation of a price break-out from the formation. For a properly formed descending triangle, the break-out should take place in respect to the support line, which signals a continuation of the downward trend.

 

How to use it with MetaTrader 5:

  • Descending triangles can be drawn on a chart by combining two trendlines or a trendline and a horizontal line.
  • The trendlines can be plotted using a “Draw trendline” icon. A horizontal line is to use the “draw horizontal line” icon in the main window panel of the MetaTrader 5 platform.

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