stephenleachman

DESCENDING TRIANGLE (TREND REVERSAL)

FX:GBPJPY   British Pound/Japanese Yen
132 0 16
The descending triangle as in all triangle patterns can be used as trend
reversals. It must be noted that the descending triangle must form at a
key level of support or resistance.This pattern forms as price pushes
into support or resistance and then consolidates making lower highs
and equal lows forming the descending triangle , Once price breaks
the pattern conforming the reversal, I personally always wait for a
pullback to the previous highs or lows to see if price will be resisted
or supported before taking a reversol trade. There are different
methods Like Fibonacci Retracements to find targets after a confirmed
reversol but I will lay out the conventional way which is the Distance
Between The Mouth Of The Triangle Added To The Breakout.

Conventional Way To Terad The Descending Triangle Reversal:

snapshot

-----Bearish Reversal-----
(1) Wait for price to push into key resistance.
(2) Wait for price to consolidate at that resistance forming an descending triangle .
(3) Wait for price to break and close below prior low. (The Triangles Lows)
(4) Sell pullback at prior low.
(5) Stop Above the previous Highs. (Also can use fibonacci retracements for stops)
(6) Target Is the Distance Between The Mouth Of The Triangle Added To The Breakout.

-----Bullish Reversal-----
(1) Wait for price to push into key support.
(2) Wait for price to consolidate at that support forming an descending triangle .
(3) Wait for price to break prior highs.
(4) Buy pullback at prior highs.
(5) Stop Below the previous Lows. (Also can use fibonacci retracements for stops)
(6) Target Is the Distance Between The Mouth Of The Triangle Added To The Breakout.
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