A Bearish Descending Triangle is a bearish continuation pattern that typically appears after a decline in price. Price consolidates briefly in the triangle and usually continues in the same direction as the previous trend.

Measuring the move: Add the vertical distance (A) of the open end of the triangle to the to the price at the breakout (B) and this would give you an approximate price target for the next run down in price.

Trading the pattern: Traders should be watching the lower trend line of the pattern. A bearish entry signal is when price pierces through the lower trend line. An important thing to note when trading this pattern is avoiding a false breakout. By entering when prices close below the lower trend line or waiting for a retest of the lower trend line, traders can prevent themselves from entering on a false breakout.

Forex Trader Library
Receive over 15 hours (8 CD's) of our best Forex trading education in one package! Containing the newest Advanced Forex CD, this education pack focuses on exactly what you need to know to become a successful Forex Trader.