GBPUSD: Rising Wedge Setup! Good short!
Hey guys! Found a Rising Wedge Pattern right here on the GBPUSD Daily chart! Soon to be completed! Watch for the breakout!
What influenced my decision:
-Falling volume
A rising wedge should always have falling volume, this shows that there are a decreasing number of buyers, which gives conviction that the pattern will fall.
-Really Strong Downtrend (both of Daily and Weekly timeframes)
This implies that the pattern would be more reliable because of the strong downtrend.
-Less than 50% Fib Level
Most times, the rising wedge is kind of a retracement on the higher timeframe, so if the rising wedge is lesser than the 50% Fib Level, this gives a stronger signal that the wedge/retracement is likely to fall!
- Narrow trend lines
In Thomas Bulkowski's Getting Started to Chart Patterns, it was discovered that narrow trend lines performed better than steeper trendlines. Basically this means that trend lines with 30 - 45 degrees will perform better than those above 60 degrees.
-Good Amount of Trend line Touches
Again, Thomas Bulkowski (this guy is a genius, read his books guys!) found out that the more times that price touches the trend lines (at least 3 touches), the breakout will perform better as it means that the breakout is more SIGNIFICANT.
Confluence Score: 5 points
Good luck guys! May the pips be with you!
Do note that not ALL of my trades will be correct 100% of the time! I only provide what I see and what I feel as a trader! Trade my views at your own risk! :)
What influenced my decision:
-Falling volume
A rising wedge should always have falling volume, this shows that there are a decreasing number of buyers, which gives conviction that the pattern will fall.
-Really Strong Downtrend (both of Daily and Weekly timeframes)
This implies that the pattern would be more reliable because of the strong downtrend.
-Less than 50% Fib Level
Most times, the rising wedge is kind of a retracement on the higher timeframe, so if the rising wedge is lesser than the 50% Fib Level, this gives a stronger signal that the wedge/retracement is likely to fall!
- Narrow trend lines
In Thomas Bulkowski's Getting Started to Chart Patterns, it was discovered that narrow trend lines performed better than steeper trendlines. Basically this means that trend lines with 30 - 45 degrees will perform better than those above 60 degrees.
-Good Amount of Trend line Touches
Again, Thomas Bulkowski (this guy is a genius, read his books guys!) found out that the more times that price touches the trend lines (at least 3 touches), the breakout will perform better as it means that the breakout is more SIGNIFICANT.
Confluence Score: 5 points
Good luck guys! May the pips be with you!
Do note that not ALL of my trades will be correct 100% of the time! I only provide what I see and what I feel as a trader! Trade my views at your own risk! :)
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