Descending Triangle Pattern Explained: A Comprehensive Guide for Traders

Chart patterns are a big part of how technical traders read the markets. They show how prices have moved in the past and give clues about what might happen next. One pattern that often signals selling pressure is the descending triangle.

It’s a pattern that repeatedly comes up on charts, especially in downtrends. And while no pattern works every time, the descending triangle can help traders spot moments when momentum might shift or when a breakout could be on the way.

In this guide, you’ll learn what the descending triangle pattern looks like, why it matters, and how traders use it to make decisions.

What is a Descending Triangle Pattern?

A descending triangle is a chart pattern that forms when the price moves between two key trend lines: a falling resistance line on top and a horizontal support line on the bottom. You’ll see lower highs as buyers lose momentum while the price keeps bouncing off the same support level. Over time, this creates a triangle shape that slopes downward.

One key thing traders look for in this pattern is volume contraction. As the range tightens, trading activity often slows down, suggesting the market is waiting for a breakout. If the price breaks below the support line, volume rises again as more traders jump in.

The descending triangle is often seen as a bearish pattern. That means it can suggest a possible drop in price, especially if sellers push through support. It doesn’t guarantee anything but shows that downward pressure has been building. 

Is the Descending Triangle Pattern Bullish or Bearish?

The descending triangle is usually seen as a bearish chart pattern. This means traders often expect it to lead to a drop in price, especially when it forms during a downtrend. But to make sense of that, let’s go over what bearish and bullish mean.

What Do “Bearish” and “Bullish” Mean?

• Bearish: Expecting prices to go down. Sellers are stronger than buyers.
• Bullish: Expecting prices to go up. Buyers are stronger than sellers

Like the descending triangle, a bearish pattern often suggests that sellers are building pressure and might lower the price once support breaks. It’s called a continuation pattern because it tends to continue in the direction the market was already moving.

So, if the price had fallen before, this pattern could mean the downtrend is likely to continue.

What Usually Happens in a Descending Triangle?

Feature	What It Suggests
Lower highs	Buyers are losing strength
Flat support line	Sellers keep testing the same price floor
Tightening range	Price is getting squeezed, momentum is building
Break below support	Often signals a further drop in price

Can it be Bullish?

Sometimes, but it’s rare. In a few cases, the price might break upward instead of down. This could happen if the trend is sideways or slightly bullish, and buyers suddenly take control. That’s called a bullish breakout. It’s not common in descending triangles, but it does happen.

False breakouts can also occur, where the price briefly dips below support but reverses and heads higher. This is why traders often wait for extra confirmation, like a strong move and a pickup in volume, before acting on the pattern.

The descending triangle is usually seen as a bearish continuation pattern, often leading to further downward movement. But patterns are never guaranteed. What happens next depends on the market context, price action, and volume around the breakout. Understanding the structure is just one part of reading the whole picture.

How to Identify a Descending Triangle Pattern

Spotting a descending triangle starts with watching how the price behaves around support and resistance. The focus is on recognising lower highs and steady lows, along with a few key details that help confirm the setup.

1. Draw the Descending Trendline

Look at the recent highs on your chart. If each one is lower than the last, connect them with a line. This creates your descending resistance line—the top of the triangle. It shows buyers backing off and sellers stepping in sooner each time.

2. Find the Horizontal Support Level

Next, spot the price level where the market keeps bouncing. This is your horizontal support. It should be tested repeatedly, with at least two or three touches, to confirm its key level.

The more times the price hits this line without breaking, the stronger the support is considered. However, in this pattern, that support is usually under pressure.

3. Watch for Volume Contraction

As the triangle forms, volume tends to shrink. This drop in trading activity shows that the market is waiting. Traders are watching and holding back until something gives. Once price breaks out of the triangle—especially with rising volume—that’s often the cue for a bigger move.

Example on PU Prime (MT5)

If you’re using a platform like PU Prime’s MT5, you can draw your trendlines directly onto the chart. Most platforms include built-in tools to mark horizontal levels, add volume indicators, and zoom in on key setups. Look for:

• Descending trendline connecting the highs
• Flat support level with at least two touches
• Volume bar that tapers off during the triangle then picks up at the breakout

Trading Strategies Using Descending Triangle Patterns

Once a descending triangle forms, some traders prepare for a possible breakout, usually to the downside. While the pattern can help spot potential setups, how you manage the trade matters.

Let’s walk through a basic approach.

Pre-Breakout Preparation

As the pattern shapes, traders often prepare charts by marking the descending trendline and horizontal support. They might also add a volume indicator to monitor trading activity changes as the triangle tightens.

At this stage, many traders avoid jumping in too early. Instead, they wait for a clear breakout to confirm the setup.

Entry Trigger

The most common entry is on a strong candle that breaks below support, often called the breakdown candle. Traders may look for the candle to close below the support level with a noticeable increase in volume before entering a short position.

Stop-Loss Placement

A stop-loss is often placed just above the descending trendline to manage risk. This gives the trade some room in case of small price fluctuations but helps limit losses if the breakout fails.

Setting a Profit Target

A standard method for setting a target is the measured move approach. This means taking the triangle’s height (from the first high down to the support level) and projecting that distance downward from the breakout point. This gives a rough idea of how far the price might run after the breakdown.

Strategy Summary

Step	What Traders Look For
Triangle forms	Lower highs, flat support, volume starts to dip
Breakout trigger	Strong candle closes below support
Stop-loss level	Just above the descending trendline
Profit target	Distance equal to the height of the triangle

Risk Management Matters

Like all patterns, descending triangles don’t work every time. That’s why risk management is crucial. Using stop-losses, keeping position sizes reasonable, and reviewing your trades can help protect you from unnecessary losses.

It’s also good to back-test your strategy or try it in a demo account before trading it live.

Platforms like PU Prime offer access to tools for testing setups. Users can use CFDs to trade on price movement without owning the asset.

Examples of Descending Triangle Patterns

Example 1: Forex – EUR/USD

Example 2: Index – NASDAQ 100.

Example 3: Crypto – Bitcoin (BTC/USD)

What These Charts Show

Descending triangles can offer strong setups, but they don’t guarantee results. Some breakouts follow through, while others fake out. That’s why confirmation and risk controls matter. A strong breakout candle, rising volume, and a well-placed stop-loss can help improve your odds.

To practise spotting and testing these patterns, you can use charting tools available on platforms like PU Prime, where you can track price action and trade via CFDs based on your market outlook.

Common Misconceptions About Descending Triangle Patterns

Like many chart patterns, the descending triangle can be misunderstood, especially by traders just starting. Let’s clear up a few common myths.

Misconception 1: It’s a Reversal Pattern

One of the biggest mistakes is thinking the descending triangle always signals a trend reversal. While it can lead to a bullish move in rare cases, it’s usually a continuation pattern. That means it appears during downtrends and signals that the price could continue lower if support breaks.

Misconception 2: Every Triangle Means a Trade

Not every triangle on a chart is a tradable setup. Sometimes, traders see the pattern they want to see, even if it doesn’t fit. For a descending triangle to be valid, there should be:

• A clear series of lower highs
• A flat support level with multiple touches
• A tightening price range

If those elements aren’t there, it’s better to move on.

Misconception 3: Volume Doesn’t Matter

Volume is often overlooked but plays a significant role in confirming a descending triangle pattern. As the triangle forms, volume typically decreases.

A spike in volume during the breakout adds weight to the move. Without that volume confirmation, the breakout is more likely to fail.

Understanding what the descending triangle pattern is not is just as important as knowing what it is. Being patient, seeking confirmation, and avoiding the urge to force a trade can help you use this pattern more effectively.

Next Steps in Your Trading Journey

Once you know what to look for, the descending triangle can be a useful pattern in your trading playbook. It’s all about recognising the signs, being patient for a proper breakout, and managing your risk.

It works best with a solid plan and regular practice, like any setup.

Tools like PU Prime’s trading platform make it easier to spot patterns and test strategies using CFDs and make it easier to react to market moves without jumping in blind.

Try PU Prime Today

Want to put what you’ve learned into practice? PU Prime gives you access to a wide range of markets through CFDs, including indices, forex, and more. You can test patterns like the descending triangle in a risk-free demo environment or explore real-time setups with flexible trading tools.

Head to PU Prime to learn more and see how the platform works.

Descending Triangle Pattern FAQs

How often does a descending triangle break downward?

Most descending triangles break to the downside, especially when they form during a downtrend. But no pattern works every time, so looking for confirmation before acting is essential.

Which time frame works best for spotting the pattern?

Descending triangles can appear on any timeframe, but they tend to be more reliable on 1-hour, 4-hour, or daily charts, where the price structure is clearer.

Can moving averages help confirm the pattern?

Yes. Some traders use short-term averages (like the 20 EMA) to confirm momentum. A break below the moving average alongside the pattern can support the setup.

How long does it take for the pattern to complete?

It varies. Some form in a few days, others take weeks. What matters more is the number of touches on support and resistance and whether volume starts to contract.

Does volume matter?

Yes. Falling volume during the pattern suggests indecision. A volume spike on the breakout can confirm that momentum is returning and the move is more likely to stick.

What if the breakout fails?

False breakouts happen. That’s why traders often wait for a close outside the pattern and use stop-losses just above the trendline to protect against quick reversals.