Descending Triangle - Stock Market Predictions

DESCENDING TRIANGLE

Below is a graph of a descending triangle. A line is drawn between various descending highs to form a descending triangle pattern. One usually only needs two points to start a descending triangle, but the more points you have the more accurate the indicator. There are some, especially the Elliot wave theorist out there that believe the maximum number of lower high to be used is 5. In Elliot wave theory, move take place in series of five. After that look for a counter trend to occur.

A descending triangle indicates bearish behavior in the various stock or indice in question. It can be implemented on various chart durations from 1 minute charts all the way up to yearly charts. It can be interesting to look at a particular stock in question for various time periods to see if multiple bearish signals are being given.

Uses of the Descending Triangle

Descending triangles give technical traders the opportunity to make substantial and consistent profits over a small amount of time. The most common profit target is found by measuring the gaps between the various highs on the graph. Of course there is some great software available, such as Metastock, which will scan the markets for you and find good trading opportunities. It can of course be done by hand also. I personally recommend following a group of about 20 to 30 stocks for an extended period to get an Idea of how they move during certain market conditions. When you see an descending (or its counterpart the ascending triangle) appear you will know how to react.

I hope you found the article about descending triangles helpful, and as always have a blessed day!

Stock Market Predictions

◦ Stock Market predictions 2011
◦ Technical Analysis Explained
◦ Fundamental Equity Analysis
◦ Candlestick Reversal Patterns
◦ Descending Triangle
◦ Stock Market Software
◦ Insider Trading Transactions
◦ Stock Market Predictions 2012