The descending triangle represents a trend continuation pattern which is formed in a downtrend serving as a confirmation of existing direction.

It reveals a narrowing range between high and low prices which visually make a triangle.

The descending triangle is defined by a descending trendline called resistance and a horizontal trendline named support. The first one connects lower and lower highs and the second one connects price lows arranged at almost the same level.

Price break below the support line ordinarily between halfway and 3/4 length of the pattern shows a signal to buy.

How to calculate
T = S – H,

Where:

T – target price;
S – support (horizontal line);
H – pattern’s height (distance between support and resistance lines at the pattern’s origin).

Descending triangles are formed with balanced lows and lower highs. A bearish sign, the pattern is usually recognized as a continuation pattern in a downtrend but can be a strong reversal signal when faced in an up-trend.

There are some other triangles too.

Bullish rectangle pattern is a trend continuing pattern which is normally made in an uptrend and signals the trend’s direction. It is identified by support and resistance levels which connect recent highs and lows of the price.
If the price rises above the resistance line a buy signal appears.

How to calculate
T = R + H,

Where:

T – target price;
R – resistance level (which is pattern’s top);
H – pattern’s height (which is a distance between support and resistance).

Bearish rectangle pattern is a trend of continuing pattern which is normally made in a downtrend and signals the trend’s direction. It is characterized by support and resistance levels which connect recent lows and highs of the price.

If the price falls below the support line a sell signal appears.

How to calculate
T = S – H,

Where:

T – target price;
S – support level (which is pattern’s low);
H – pattern’s height (which is a distance between support and resistance)
.

Also, there are a lot of other patterns but this is the basic and everyone who wants to enter the market should know about these patterns and charts we represented to you.

The other will come as time goes and you walk over your trading path.

The point is, there are many ways to pick stocks. Normally, longer-term investors will rely on fundamental analysis. They are focused on the information about a company’s management, rivals, growth rate, and potential, income and revenues, to attempt to discover if it is a good profit. Many key metrics such as earnings per share, price-to-earnings ratio, price-to-earnings growth, and dividend yield have been developed over the years to make it easier to analyze two companies with different share values, a varying number of shares excellent, or just different corporate structures, side by side.

Shorter-term traders usually employ technical analysis. They are focused on patterns within stock charts. That is their way to examine to calculate future pricing and volume trends. Technical analysis is based on the theory that future patterns and movement will frequently be related to previous patterns and movement. Advocates of the technical analysis think that charts display all the information that is known about a special company, by those who are trading it. Their movements are directly displayed in how chart patterns appear.

# Quiz yourself about Descending Triangle indicator in the following quiz:

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