# Descending Channel

<figure><img src="https://1202482183-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FOMCfkIQdD0p3a3DRHXex%2Fuploads%2FR4oedBi48NLlbP0XaRj0%2FScreen%20Shot%202022-10-22%20at%2010.33.53%20PM.png?alt=media&#x26;token=953e0733-ff8d-4039-b63e-899571420a5c" alt=""><figcaption></figcaption></figure>

A **descending channel** is a bearish chart pattern formed by two downward-sloping trendlines.&#x20;

1. **Pattern Description**:
   * The **upper trendline** (drawn along the highs) defines the resistance level.
   * The **lower trendline** (the “channel line”) runs parallel to the upper trendline and acts as support.
2. **Trading Strategies for Descending Channels**:
   * **Short Opportunities**:
     * When the price nears the **upper trendline**, consider short positions.
     * Aggressive traders may trade both long and short at both trendlines, anticipating a bounce or pullback.
   * **Breakouts**:
     * Wait for the price to **break through** either trendline.
     * An **upside breakout** signals a strong buy.
     * A **downside breakout** suggests significant weakness.
   * **Trend Shifts**:
     * A break above the **upper trendline** could indicate a shift in trend.
     * Breaking the **lower channel line** signals an acceleration of the current downtrend.
   * **False Breakouts**:
     * Be cautious of false or premature breakouts.
     * Sometimes, price retreats back into the channel.