Descending trend channels are basic chart patterns used in technical analysis. This kind of trend channel is created through drawing two trend lines, one through the high prices for an asset and one through the low prices for the asset. If the trend in prices is downward, then the space between the trend lines forms a descending trend channel.
Descending and ascending trend channels both serve same purpose for investors. Since, they are used to determine the overall short price trend .The trend of prices remain same As long as prices remain within the region created by the trend channel. Investors feel a strong buying or selling signals once price breaks out of the channel. If prices break upward out of the channel, the signal is bullish; if prices break downward, the signal is bearish.Descending trend channels often appear within an overall uptrend in prices, and represent either a continuation of the trend or a reversal of the trend, depending on the direction of the break.