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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