Just spotted a pattern that traders keep missing in downtrends - the descending flag pattern. This thing is actually super common but people don't always recognize it until it's too late.

Here's the deal: after a sharp selloff, price bounces back and consolidates. That bounce looks promising to bulls, but that's exactly the trap. You get these two parallel trendlines forming - one connecting the rebound highs, another connecting the pullback lows - and it literally looks like a flag on the chart.

The key thing about this descending flag pattern is that volume dries up during the consolidation phase. That's your warning sign. When volume is shrinking like that, it usually means the downtrend isn't done yet. Then when price finally breaks below the lower support line, you often see volume spike again, which confirms the next leg down is coming.

What I've learned from watching this play out repeatedly: those rebound highs? Don't hold through them. That's where you should be taking profits or reducing exposure. The real move happens when support breaks. I've seen too many traders get trapped thinking the rebound is a reversal - it's not, it's just a pit stop on the way down.

So if you're analyzing charts and you spot this descending flag pattern forming, treat it as a continuation signal, not a reversal. The psychology here is bearish accumulation disguised as hope. Once that support line cracks, that's your signal to exit decisively. The pattern doesn't lie - the breakdown usually leads to a fresh wave of selling.