Lower Highs Signal Pressure – Bearish Descending Triangle

A Descending Triangle pattern in Forex trading is a bearish continuation chart pattern that typically forms during a downtrend, indicating the potential for the trend to continue. Here's a breakdown:

📉 What Is a Descending Triangle?
It is formed when:

Support (horizontal line) is repeatedly tested but not broken.

Lower highs are formed, creating a descending trendline above.

The triangle shape comes from the descending trendline (resistance) and the flat support line.

📊 Structure of the Pattern:
Upper Trendline: Sloping down, connecting lower highs.

Lower Support Line: Flat, connecting equal lows.

Price gets squeezed between the two lines until it breaks out — usually downward.

🔍 How to Trade It:
✅ Entry:
Enter a sell trade when the price breaks below the support level with strong volume.

🛑 Stop Loss:
Just above the last lower high or above the descending trendline.

🎯 Take Profit:
Measure the height of the triangle and project it downward from the breakout point.

🧠 Tip:
While it’s a bearish pattern, false breakouts can happen. Wait for confirmation:

Retest of broken support (now resistance)

Increase in volume at breakout

📌 Example Use:
If XAUUSD is forming a descending triangle at $2,320 support with lower highs (e.g., $2,340 → $2,330 → $2,325), a break below $2,320 with high volume might signal a sell opportunity.