Bearish Pattern - Top Right Triangle
A bearish reversal pattern that signals the start of a downtrend following an extended consolidation period.
Pattern Overview
It is a YC bearish trend reversal pattern comparable to an imaginary right triangle. It is made up of two sides joined at a 90 degree angle and linked by a hypotenuse.
Horizontal Line (Long side): Connects two or more near-equal market lows. (Line 1)
Vertical Line (Short side): Extends from the horizontal to the highest market point above it. (Line 2)
Hypotenuse: Connects descending market highs, indicating bounces above the horizontal. (Line 3)
Formation
Wait for at least two valid bounces and a clean structure before planning entry.
A minimum of two, ideally three, descending bounces from the left must occur above the horizontal river-line support.
Velocity within bounces: Rises from the horizontal river-line support to highs (B1, B2, B3) should be slower than the declines back to it (see candle counts in the pic).
Signal Confirmation
A bearish setup is confirmed after breakdown and controlled retest near the key level. Place stop loss above invalidation.
A sell signal is generated when the price closes below the horizontal line after at least two bounces.
A stop loss should be set just above the most recent bounce high before the breakout.
Historical Performance
Historical cases show meaningful downside when confirmation and risk management are respected.
Some Examples
