Descending Triangle is the Triangle shape with horizontal bottom and down- sloping top. Two price trendlines, the bottom one horizontal and the top one sloping down, form a triangle pattern. The two lines join at the triangle apex. Prices should not cross the chart pattern several times. They should not leave a vast amount of white space in the center of the triangle.
Percent of successful formations – 67%
Failure rate – 45%
Average time to throwback completion – 3 hours
Calculate the height of the formation by subtracting the value of the lower trendline from the upper one at the formation start. Subtract the height from the value of the lower trendline to get the predicted minimum price decline. Alternatively, draw a line parallel to the down-sloping trendline starting at the lower left corner of the formation. The value of this line where prices break out of the formation becomes the target price.