Descending Triangles - Troughs form a horizontal line while a series of falling peaks create a line that is a downward sloping resistance line. The indication is that supply becomes more aggressive as sellers lower their valuation perceptions. Breakout is usually to the downside. In the case of most triangles, the odds are that the trend leading into the triangle continues on the breakout of the triangle. It is not out of the question, when fundamental indecision and with no change in psychological setting in the market, for the market to continue in a sideways motion through the apex of an earlier triangle formation.
Triangles are subject to many false moves and are among the least reliable of chart patterns.
When a breakout occurs, the trend that results is expected to be in the direction of the breakout. Generally, it is a good idea to watch volume when a breakout occurs. A breakout on increasing volume is a good sign for a continuation of the price trend in the direction of the breakout. The intensity of buying and selling pressure and the conviction behind each move can be useful in determining the validity of the break out. But remember that when markets are in a trading range there is a build up of stop loss orders just outside of the pattern, on both sides of the market, that can create volume spikes when a breakout does occur.