Descending Scallop Chart Pattern — How to Spot and Trade It

An inverted-J rounded rally and rollover within a downtrend.

In plain words

A wave curling over before it crashes.

What the classic books say

The Descending Scallop is a continuation pattern with reference reliability Medium and illustrative behaviour of ~60% continue downward (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). Mirror image of the ascending scallop.

Level by level

Beginner

A rounded lift that rolls back over — the downtrend resumes.

Intermediate

Distribution traces an inverted saucer; the rim break resumes the decline.

Advanced

Watch momentum divergence at the curl for early positioning.

Trade plan (educational template)

• Entry: On the break below the scallop's origin.
• Stop-loss: Above the scallop's high.
• Target: Scallop height projected below the break.
• Check the numbers with the Risk-Reward calculator before any entry.

Common beginner mistakes

• Buying the rounded lift in a downtrend

Practise it now

• ▶ Draw the Descending Scallop with live trendlines and a ghost forecast
• 📖 Full lesson in the Learning Hub

_Educational content only — not financial advice. Historical behaviour never guarantees future results._