📈How to Trade: Rising Wedge Pattern📌 What is the Rising Wedge Pattern?
The rising wedge is a bearish chart pattern found at the end of an upward trend in financial markets. It suggests a potential reversal in the trend. It is the opposite of the bullish falling wedge pattern that occurs at the end of a downtrend. Traders recognize the rising wedge as a consolidation phase after a medium to long-term trend, indicating a decrease in momentum. Traders often use this pattern as a signal to take a short-selling position or exit their current position.
📊 How to Identify and Use the Rising Wedge
🔹 Identify an existing trend in a currency pair.
🔹 Draw support and resistance trend lines along with the highs and lows of the trend.
🔹 Wait for price consolidation and the contraction of the support and resistance lines, forming a rising wedge pattern.
🔹 Observe the upper trend line acting as resistance and the lower trend line acting as support, converging towards each other.
🔹 Place a sell order once the price breaks below the support line of the rising wedge pattern.
🔹 Set a stop-loss order at the same level as the support trend line to manage risk in case the price reverses.
🔹 Consider setting a profit target based on the distance between the highest and lowest points of the wedge pattern or by using a technical indicator or a previous support level as a reference.
💥 Key Takeaways:
🔸 The rising wedge is a technical chart pattern used to identify possible trend reversals.
🔸 The pattern appears as an upward-sloping price chart featuring two converging trendlines.
🔸 It is usually accompanied by decreasing trading volume.
🔸 A rising wedge is often considered a bearish chart pattern that indicates a potential breakout to the downside.
🔸 Wedges can either form in the rising or falling direction.
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Risingwedges
Bearish Wedge Sell Points (in red)Two different types of Wedges both showing a similar sell point entry
The sell point is right below the wedge, so if a breakdown occurs, a retest and consequent rejection follows
This is common between both wedge patterns
From personal experience I have seen Rising Wedges act more bearishly than Broadening (megaphone) structural wedges
However both of them have the potential to be bearish.
AUDCADIN AUDCAD we can see price is rejecting from its daily and 4H strong reistance zone and now price is forming rising wedge patterns in uptrend which is the sign of reversal one more confirmation is rsi bearish divergence but we need to confirm this after the breakout of rising wedge down side than we entr short position and out targets are wedge starting point which is 0.9284 and if this level break than we try to achieved TP2. NOW talk about stoploss which is very important so our SL is This red resistance zone 20 to 25 pips above this zone.
Look for the big short!Hello everyone, BTC/USD weekly seems to form a rising wedge and we can clearly see that since we bottomed around $3700 which got a lot of demand, price kept going up slowly but volume kept decreasing on its way up.
Also as long as long we remain in this long term descending channel i clearly do not see us going higher than around $8800.
I think we could double top around that price level and I will remain overall bearish unless Bulls are able to break above that strong level of resistance.
Let's wait and see!
Two Shapes of Falling Wedge PatternsIn the previous educational post, i posted about Rising Wedge patterns and in this post i have explained about Falling Wedge Patterns. (Falling Wedge is opposite of Rising Wedge pattern; for every chart patterns there are opposite patterns excluding some.)
Falling Wedges are Bullish Patterns and it generates bullish signal, Falling wedge patterns forms with Lower highs and Lower lows.
Falling Wedge pattern basically forms in two shapes same as Rising Wedge ; If Falling wedge pattern forms in an uptrend it will make continuation and if Falling wedge pattern forms in a downtrend it will make reversal.
The Lower highs and the lower lows along makes a trend resistance and trend support. When breakout occurs upside, price breaks the trend resistance line.
In Falling wedge breakout occurs upside 60 to 70% of the time.
To confirm a true breakout, we can take help of Volume and other indicators. In a true breakout there will be big volume than usual.
We should use other indicators like MACD and RSI also to confirm that it will turn bullish before taking entry in a trade. (We can see MACD convergence, RSI convergence)
Stay Tuned 👍 ;
Thank You;
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EPAY to push to new ATH?This current upward trend is strong and may result in another Bump and Run or a complete creation of a new stronger upward move. RSI shows a weak setup however volume is large and could possibly lead to a break of the current trend. If this results in failure return to the trend from the resistance line is probable.
EURUSD Confirm DOWNWARD!Back to using supply and demand analysis, by combining chart patterns, we get the potential for downside after EURUSD is confirmed to have a "breakout". Where in some patterns that are happening right now, the price is experiencing some "Rising Wedges" patterns. It is predicted that prices will decline with the target in the demand zone below.
Best Regards,
Don_Hawkish
COST Regression analysisPresence of a rising wedge, broadening ascending wedge, Costco has been on a massive bull run. Rounded top also present which may be indicative of a bearish move, but with the strong rising channel and regression trend of 0.92 (strong regression trend according to Pearson's R value) the chart appears definitely more bullish rather than bearish.
S&P - Time to Hedge SPY
The Trade
SPY and other index ETFs are putting in rising wedge patterns, as seen in the chart, every rising wedge has been met with a subsequent mean reversion at least, or more substantive drop at worst (i.e. the drop in May). So it is time to hedge your positions accordingly, both to protect and profit from the drop that looks set to come in the next week or so. Personally i will be using Put options on SPY.
Fundamentals:
The stock market got what it wanted, at least for now, Jerome Powell has signaled to congress that rate cuts are a go, the stock market has enjoyed quite the rally over the past few weeks, with new high after new high being taken out on major indices.
With that in mind, it is time to hedge, my inclination is that markets have been rallying in part, due to them pricing in the prospects for a rate cut, with TLT dropping over 1% last night, it is only a matter of time until SPY follows suit.
So, now is the time to hedge your market long positions, either with options or buy purchasing an inverse ETF.
In the case of the SP-500, the inverse SH is suitable.