Learning: Descending Triangle Pattern (Descending Triangle)

Let's break down a powerful bearish pattern in technical analysis. The descending triangle is a classic trend continuation pattern (here referring to a downtrend), indicating that sellers (bears) continue to dominate the market, preparing to push the asset further down.

What it looks like on the chart (see screenshot):
1. Horizontal support: Price repeatedly tests a strong horizontal support level (red line). Buyers are trying to hold this level.
2. Descending resistance: The upper price is suppressed by a downward trendline (blue line). Each new high is lower than the previous one, indicating weakening buying strength.
3. Consolidation: Inside the pattern, the price fluctuates in a zigzag manner (clearly visible from points 1, 2, 3, 4 on the chart). The oscillation range gradually narrows.

What is the logic?
Although buyers are defending the support level, they cannot push the price above the previous high. This is a clear sign of demand weakness. Once large traders finish unloading, the support will be broken, and the price will plummet amid a cascade of long liquidations.

How to trade correctly:
- Entry: Do not enter inside the triangle! Short positions should only be taken after the horizontal support is effectively broken. Preferably, wait for a solid bearish candle to close below the support.
- Stop-loss: Safely place it inside the triangle, above the last local high. This protects your account from malicious whipsaws.
- Take profit: Measure the widest part of the triangle when it first forms. Then, from the breakdown point, measure down the same distance. That is our final target, and taking profit here yields big gains.

Pullback confirmation: Usually, after the breakdown, the price will retest the broken support line (which then becomes resistance). This is a good opportunity to add to your position or enter more safely.

Master the basics and trade rationally!