Descending triangles can be recognised by drawing trendlines, in this case we can see lower highs and a support baseline at the bottom.
This from my perspective looks like the bears are in control, pushing the price down and re-testing the support.
Every time the support gets tested, it get's weaker, so to me descending triangles strongly indicate a continuation trend on the bear side.
In this case, I prepare for either / or scenarios, and get in on the action no matter the direction.
Here's my gameplan:
- If the price action decisively breaks the upper bound of the lower highs trend line, this could strongly indicate a bullish reversal, so I would use my oscillators to confirm the reversal, and I would enter a LONG position here
- If the price action decides to go down and break the support area, this could indicate that the bears have successfully weakened the support enough for a bearish continuation. Because the chart pattern favours this direction, I would enter a SHORT position straight away.
This from my perspective looks like the bears are in control, pushing the price down and re-testing the support.
Every time the support gets tested, it get's weaker, so to me descending triangles strongly indicate a continuation trend on the bear side.
In this case, I prepare for either / or scenarios, and get in on the action no matter the direction.
Here's my gameplan:
- If the price action decisively breaks the upper bound of the lower highs trend line, this could strongly indicate a bullish reversal, so I would use my oscillators to confirm the reversal, and I would enter a LONG position here
- If the price action decides to go down and break the support area, this could indicate that the bears have successfully weakened the support enough for a bearish continuation. Because the chart pattern favours this direction, I would enter a SHORT position straight away.