Below is a slider quiz to test your ability to identify descending triangles and trade them. Captions appear below the pictures in red for guidance, so be sure to scroll down far enough to read them.
1 / 7
The descending triangle, shown here in red, has a flat bottom and down-sloping top. The two trendlines outlining the pattern converge at the triangle's apex. Although the triangle is supposed to breakout downward, recent tests reveal that it breaks out upward 53% of the time. Price should cross the pattern from top to bottom plenty of times, filling the white space with price movement. This example has a downward breakout. Let's try to find some in the next slide.
2 / 7
Find as many descending triangles as you can. For help, click here. Answers appear on the next slide.
3 / 7
Point B marks the head of a very nice looking head-and-shoulders top. Tell your neighbors! Outlined in red is the triangle. The apex often, but not always, marks a turning point. Notice that price forms a minor high at B, directly above A. You'll see this behavior often, but the turn can be within a day or two of the triangle's apex. And the turn doesn't have to be lasting (forming a new trend like you see here). Rather, it's short, like a minor high. Let's try again to find more triangles.
4 / 7
Find as many descending triangles as you can. Answers appear on the next slide.
5 / 7
This one has an upward breakout. Let's try to trade them next.
6 / 7
This descending triangle has a downward breakout. How far will price drop? Has it found the ultimate low at A (where price is at now), B, C, or none of the above? The next slide has the answer.
7 / 7
Choice B is the correct answer. This is the end of the quiz.