DEFINITION of 'Descending Tops'

A pattern in charts where each peak in price is lower then the previous peak in price. The pattern signals a bearish trend in the security.

Descending Tops



The above is an example of descending tops.

BREAKING DOWN 'Descending Tops'

If the current peak in the price is higher then the previous peak in a descending top environment, the trend is broken and this is a bullish signal.

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RELATED FAQS
  1. How are descending tops interpreted by traders and technical analysts?

    Find out how technical analysts and traders identify and interpret a descending tops pattern and why this pattern is viewed ... Read Answer >>
  2. How important are descending tops for a trading strategy?

    Find out what it means when a security or indicator is showing a descending tops pattern on a price chart, and what it says ... Read Answer >>
  3. How do traders identify descending triangle patterns?

    Learn how to identify a descending triangle pattern on a security or index's price chart, and discover why traders consider ... Read Answer >>
  4. How do I implement a forex strategy when spotting a Multiple Tops pattern?

    Understand how to use a multiple tops chart pattern to establish a profitable forex trading strategy, including the optimal ... Read Answer >>
  5. What trading opportunities does a descending triangle offer?

    Learn about the trading opportunities that may be presented with a descending triangle chart pattern, including when traders ... Read Answer >>
  6. How effective is creating trade entries after spotting a Multiple Tops pattern?

    Understand the basics of trading based on a multiple tops chart pattern, and learn what elements should be of primary focus ... Read Answer >>
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