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Definition of 'Descending Channel'
A descending channel or downtrend is the price action contained between two downward sloping parallel lines. Lower pivot highs and lower pivot lows are a bearish signal. In a downtrend, a trade might be entered at the trendline and exited at the channel line. A lower low below a descending channel can signal continuation. A higher high above the low of an ascending channel can signal trend change.
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Investopedia explains 'Descending Channel'
Price channels show trend direction. The slope of the channel shows momentum. Here is a simple technical edge: start the down trendline using two lower pivot highs and stay short below the trendline.
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Find out how to build these charts showing buy, sell, stop-loss and take-profit points, and even estimate length of trade.
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Discover how to measure the line of an uptrend or a downtrend.
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We teach you how to confirm buy and sell signals by comparing two very simple indicators.
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