BTC - Practical Descending Triangle Example! 🖋

Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.

I find BTC chart interesting as it is forming a textbook Descending Triangle, so I thought it would be a practical example to highlight it now.

📌 First, let's start with the definition of a Descending Triangle:
🗒 What is a Descending Triangle?
A descending triangle is a bearish chart pattern used in technical analysis that is created by drawing one trend line that connects a series of lower highs and a second horizontal trend line that connects a series of equal lows.

📉 Traditionally, a regular descending triangle pattern is considered to be a bearish chart pattern.

However, in my opinion, even thought a bearish continuation is more probable, all triangles are bilateral patterns. Means they can be broken either side.

📌 How to trade a Descending Triangle pattern?
🗒 Remember: A pattern would be an idea, until activated.

In our case, for the descending triangle pattern to get activated, we need an H4 candle close below the lower bound. (around 15500 in red)

In parallel, for the bulls to kick in, and invalidate the bearish scenario, we need an H4 candle close above the upper bound. (around 17100 in blue)

📌 Trade / Risk Management:
🗒 When the pattern is activated, you can enter immediately after the candle closes, or wait for it to retest the trendline first.

Regarding the stop loss, it goes above/below the last high/low from the other side.

Regarding the take profit, the project would be the biggest distance between the highs and lows inside the triangle.

Hope you find this post useful. Let me know if you have any questions.

Always follow your trading plan regarding entry, risk management, and trade management.

Good luck!

All Strategies Are Good; If Managed Properly!
~Rich