The sharper the wedge's lower border up-slope than that of the upper border, the better the R:R. This pattern is commonly found on all time frames. Since the price action inside the wedge formation is an uptrend, and since its target is a bearish one, the breakout volume should be considerably high to confirm that more bears are entering the market. However, it is acceptable for a rising wedge pattern to form without both borders intersecting in the near future, the key point is that the wedge's lower border up-slope must be sharper than that of the wedge's upper border. The pattern is completed when price action reverses direction from the second support (4) and goes downwards till it breaks the wedge's upper border at point (5) NOTES ON RISING WEDGEīefore the breakout, 4 touches to the wedge's upper and lower borders are the minimum for a valid pattern, more touches are acceptable.įor the pattern's shape to converge, the up-slope of the wedge's lower border (1-3-.) must be considerably sharper than that of the upper border (2-4-.). Price action reverses direction from the second resistance (3) and goes upwards, till it finds the second support (4), which must be higher than the first support (2) ![]() Price action reverses direction from the first support (2) and goes downwards, till it finds the second resistance (3), which must be higher than the first resistance (1) Price action reverses direction from the first resistance (1) and goes upwards till it finds the first support (2), which will be the lowest high in the pattern. ![]() Price action finds the first resistance (1), which will be the lowest low in the pattern. However, bears suddenly start a downtrend by breaking the wedge's lower border resistance that was created by the bulls. As bears try to fight back, it looks like the bulls have the upper hand as higher lows and higher highs are being formed. Bulls make the first move by creating a resistance and pushing the exchange rate upwards. This chart pattern can be formed after either an uptrend or a downtrend. Stop loss: can either be the breakout rate (5), or the last touch to the wedge's upper border (4) before the breakout RISING WEDGE PRICE ACTION Take profit: identified by measuring the vertical distance between the first resistance (1) and the first support (2), that measurement is then applied from the breakout rate (5) ![]() Illustration of how to trade rising wedge chart patternĮntry: after breaking the wedge's lower border at point (5), either with an entry after the breakout, or after a possible retest of the lower border's breakout rate.
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