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Wedge

Decoding Wedge PatternsThere is a strong bias about chart patterns and their interpretation in the technical analysis space. It is a very common belief that a rising wedge forms bearish sentiment and a falling wedge forms bullish sentiment. Is that really true and how much we can rely on such bias? In order to understand this, we need to dig a little bit about how such concepts could have come into the picture. The best I could get on the internet is an article from Investopedia that explains few technical reasons and constraints of using these patterns. Through the Lens of Diagonal Waves But, when I was studying the concepts of waves, this is what I found from one of the sources I referred to about diagonal waves: ewtaf.com Details are summarised and explained in the below diagram The summary here is, Diagonal waves of contracting types are the same as that of Contracting Wedge patterns. And the diagonal waves of Expanding types represent expanding wedge chart patterns. Diagonal Waves can appear as sub-waves in multiple parts of the entire Elliott Wave. And here are our scenarios Leading Diagonals Leading diagonals are diagonal waves that can appear towards the start of a trend. This can be Wave 1 of an Impulse Wave - This is the start of a new trend. Avoid trading these wedges as they can be short pullbacks. Or better look for pullback and trading opportunities in the direction of the wedge. Wave A of a Zigzag Wave - This can lead to a possible bull trap or bear trap. The corrective wave is likely to continue after a small pullback Ending Diagonals Both expanding and contracting types can be ending diagonals. Can appear as Wave 5 of an Impulse Wave - Meaning the trend is coming towards possible exhaustion. Wave C of zigzag or flat - Correction or pullback is coming to an end and the trend is likely to continue Wolfe Wave Wolfe wave is a rule built on top of wedge patterns to identify time-bound targets. The idea of generating targets and stops based on the Wolfe Wave is as shown below:  Further, here are a few indicators developed in Pinescript that can help do them automatically. Wolfe Scanner Wolfe Strategy Takeaways Here are a few things we learnt from our study. When you are looking for wedge patterns on the chart, look for wedge formations created by 5 pivots. You can learn more about this from this post Fitting Patterns To Your Bias? Before trading a wedge pattern, try to identify if the pattern fits in a bigger scheme of things. Check if they are towards the end/start of a trend or pullback Concepts such as Wolfe Wave can help setup rules for trading wedge patterns for pullbacks.
Education
by Trendoscope
9
Wealth Unleashed: Wedge Pattern Power - Hidden Gem Revealed!Introduction: Are you looking to skyrocket your trading profits? Look no further! Today, we will uncover the hidden gem of trading patterns: the Wedge Pattern. This powerful tool has the potential to transform your trading strategy and help you achieve financial success. Let's dive into the world of wedge patterns and explore how you can capitalize on their power. What are Wedge Patterns? Wedge patterns are popular among traders due to their high probability of forecasting trend reversals. These patterns appear when the price of an asset consolidates between converging support and resistance lines. There are two primary types of wedge patterns: the rising wedge and the falling wedge. Rising Wedge: In an upward trend, the rising wedge is considered a bearish pattern. It forms when the price consolidates between an upward-sloping support line and an upward-sloping resistance line that are converging. As the price approaches the apex of the wedge, the upward momentum weakens, signaling a potential trend reversal to the downside. Falling Wedge: Contrary to the rising wedge, the falling wedge is a bullish pattern. It appears in a downward trend when the price consolidates between a downward-sloping support line and a downward-sloping resistance line that are converging. As the price nears the apex of the wedge, the downward momentum loses strength, indicating a possible trend reversal to the upside. Trading Strategies: To capitalize on the power of wedge patterns, follow these steps: ✅Identify the pattern: Observe the chart for converging support and resistance lines to spot a rising or falling wedge pattern. ✅Confirmation: Wait for a breakout from the wedge pattern, either above the resistance line (for falling wedges) or below the support line (for rising wedges). ✅Entry point: Open a long position after a breakout above the resistance line in a falling wedge, or a short position after a breakout below the support line in a rising wedge. ✅Stop-loss and take-profit: Set your stop-loss order below the breakout level (for falling wedges) or above the breakout level (for rising wedges). Establish your take-profit target at a level that aligns with your risk-reward ratio and trading plan. Conclusion: The wedge pattern is a hidden gem that can potentially boost your trading profits when used correctly. By mastering the art of identifying and trading wedge patterns, you can strengthen your technical analysis skills and increase your chances of success in the market. Remember, no single tool guarantees success, so always use additional technical indicators and maintain a disciplined approach to risk management. Happy trading!
Education
by Yaroslav_Krasko
Learn Top 4 Price Action Pattern to Trade Reversals Hey traders, In this article, I will share with you the list of 4 best reversal price action patterns. 📍Ascending & Descending Triangles The main element of the ascending triangle as the REVERSAL pattern is the BEARISH impulse leg, preceding the formation of the pattern. The pattern consist of 2 main elements: a horizontal neckline based on the equal highs, a rising trend line based on the higher lows. ❗️The trigger is a bullish breakout of a neckline of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying at least below the level of the last higher low. 🎯Take profit is the next historical resistance. —————— 📍The main element of the descending triangle formation as the reversal pattern is the BULLISH leg, preceding the formation of the pattern. The pattern consist of 2 main elements: a horizontal neckline based on the equal lows, a falling trend line based on the lower highs. ❗️The trigger is a bearish breakout of a neckline of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying at least above the level of the last lower high. 🎯Take profit is the next historical support. 📍Rising & Falling Wedges What makes a rising wedge pattern a reversal pattern? Before the formation of the pattern, the price should form a strong bullish impulse and trade in a bullish trend. The pattern consists of 2 contracting, rising trend lines based on the higher highs and higher lows. ❗️The trigger is a bearish breakout of a support of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying above the high of the pattern. 🎯Take profit is the closest horizontal support. —————— What makes a falling wedge pattern a reversal pattern? Before the formation of the pattern, the price should form a strong bearish impulse and trade in a bearish trend. The pattern consist of 2 contracting falling trend lines based on the lower lows and lower highs. ❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying below the low of the pattern. 🎯Take profit is the closest horizontal resistance. 📍Double Top & Bottom Double bottom pattern usually forms at the end of a bearish trend. After a strong bearish impulse, the price retraces, sets a lower high and retests the current low. Instead of going lower, the price retraces one more time, retests the level of the last lower high and breaks it. Such a formation confirms a bullish reversal. ❗️The trigger is a bullish breakout of a neckline of the pattern and a candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying below the lows of the pattern. 🎯Take profit is the closest horizontal resistance. —————— Double top pattern usually forms at the end of a bullish trend. After a strong bullish impulse, the price retraces, sets a higher low and retests the current high. Instead of going higher, however, the price retraces one more time, retests the level of the last higher low and breaks it. Such a formation confirms a bearish reversal. ❗️The trigger is a bearish breakout of a neckline of the pattern and a candle close below. 📈The position is opened on a retest. 🔴Stop loss is lying above the highs of the pattern. 🎯Take profit is the closest horizontal support. 📍Head & Shoulders Pattern & Inverted One Inverted H&S pattern usually forms at the end of a bearish trend. The price forms a zig-zag movement with 3 main elements: the left shoulder with a lower low, the head with a new lower low, and the right shoulder with a higher low. While the price sets multiple lows, it keeps setting the equal highs, composing a so-called horizontal neckline. A bullish reversal becomes confirmed once the price breaks and closes above the neckline. ❗️The trigger is a bullish breakout of a neckline of the pattern and a candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying below the lows of the pattern. 🎯Take profit is the closest horizontal resistance. —————— Head & Shoulders pattern usually forms at the end of a bullish trend. The price forms a zig-zag movement with 3 main elements: the left shoulder with a higher high, the head with a new higher high, and the right shoulder with a lower high. While the price sets multiple highs, it keeps setting the equal lows, composing a so-called horizontal neckline. A bearish reversal becomes confirmed once the price breaks and closes below the neckline. ❗️The trigger is a bearish breakout of a neckline of the pattern and a candle close below. 📈The position is opened on a retest. 🔴Stop loss is lying above the highs of the pattern. 🎯Take profit is the closest horizontal support. In order to increase the accuracy of trading these patterns, I would recommend trading them only if they are formed on key levels: Bearish patterns on key resistances and bullish patterns on key supports. Also, higher is the time frame where you spotted the patterns, higher is the chance that it will give a valid reversal signal. ❤️Please, support my work with like, thank you!❤️
FOREXCOM:XAUUSDEducation
by VasilyTrader
17
Uncovering Wyckoff Accumulation Secret PatternWyckoff Accumulation & Distribution is a trading strategy that was developed by Richard Wyckoff in the early 1900s. It is based on the premise that markets move in cycles and that traders may recognize and use these cycles. In accumulation phase Wyckoff strategy involves identifying a Trading Range where buyers are accumulating shares of a stock before it moves higher. This allows traders to enter into positions at lower prices and benefit from the eventual price increase. Wyckoff Accumulation is an effective way for traders and investors to gain on market movements and make profits from their trades. The Wyckoff Trading Ranges feature a chart pattern called Descending Wedge. This pattern involves two trendlines, one falling and one rising, which converge to form a wedge shape. This pattern indicates that the price of an asset is likely to break out in the direction of the falling trendline. In my understanding, "Continuous Weakness" means a shift away from selling towards buying. Sellers fail to hold the pressure, so buyers take the lead leading in D,E: MARKUP phases. Kind regards Artem Shevelev Please check out my older Education Ideas Consider put like and follow my page for more updates)
BITSTAMP:BTCUSDEducation
by ArShevelev
3
📉 4 Common Bearish PatternsIn trading, a bearish pattern is a technical chart pattern that indicates a potential trend reversal from an uptrend to a downtrend. These patterns are characterized by a series of price movements that signal a bearish sentiment among traders. 📍Bear Flag 🔸 A small rectangular pattern that slopes against the preceding trend 🔸 Forms after a rapid price decline (flagpole) 🔸 The pattern is completed when the price breaks below the lower trend line of the flag 📍Descending Triangle 🔸 A bearish continuation pattern that forms with a horizontal support line and a descending trendline 🔸 Forms as the price reaches lower highs, while the lows remain at the same level 🔸 The pattern is completed when the price breaks below the horizontal support line 📍Rising Wedge 🔸 A bearish reversal pattern that forms with a series of higher highs and higher lows 🔸 The pattern forms as the price moves up in a narrowing range 🔸 The pattern is completed when the price breaks below the lower trendline 📍Triple Top 🔸 A bearish reversal pattern that forms with three peaks at the same price level 🔸 The pattern forms as the price reaches resistance at the same level multiple times 🔸 The pattern is completed when the price breaks below the support level, which connects the lows between the peaks 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
21
Classic Reversal Pattern You Must Know ☑️WHAT IS THE RISING WEDGE PATTERN? The rising (ascending) wedge pattern is a bearish chart pattern that signals a highly probable breakout to the downside. It’s the opposite of the falling (descending) wedge pattern (bullish). A rising wedge can be both a continuation and reversal pattern, although the former is more common and more efficient as it follows the direction of an overall trend. The rising wedge consists of two converging trend lines that connect the most recent higher lows and higher highs. In a rising wedge, the lows are catching up with the highs at a higher pace, which means that the lower (supporting) trend line is steeper. ☑️KEY FEATURES • The price action temporarily trades in an uptrend (the higher highs and higher lows) • Two trend lines (support and resistance) that are converging • The decrease in volume as the wedge progresses towards the breakout The third point is seen more as a boost to the validity and effectiveness of the pattern, rather than a mandatory element. And it is applicable either for stocks trading mostly. ☑️SPOTTING THE RISING WEDGE Identifying a rising wedge is not so difficult. As a first step, you should eliminate all types of wedges that are present in the sideways-trading environment. The ascending wedge occurs either in a downtrend as the price action temporarily corrects higher, or in an uptrend. ☑️TRADING THE RISING WEDGE Trading the rising wedge pattern is pretty easy. After we correctly identified the pattern all we need to do is wait patiently for the breakout of the wedge to the downside. After the breakout is confirmed(usually at least a 4H candle needs to close below the broken level) we can place a limit order to short the pair on a pullback giving us a better risk to reward ratio. The correct Stop Loss should be placed above the last higher high established by the wedge before the breakout. What concerns the Take Profit level, it must be based on the technical levels below( If there are any). If not, then we might use Trailing Stop or just choose a minimal acceptable RR of 1:1,5 ❤️Please, support our work with like & comment!❤️ What do you want to learn in the next post?
OANDA:XAUUSDEducation
by UnitedSignals
8
Learn Best Price Action Pattern For Trend-Following Trading 📚 In this educational articles, I will teach you the best price action patterns for Trend-Following Trading. 📍Ascending & Descending Triangles The ascending triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish. The pattern consist of 2 main elements: a horizontal neckline based on the equal highs, a rising trend line based on the higher lows. ❗️The trigger is a bullish breakout of a neckline of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying at least below the level of the last higher low. 🎯Take profit is the next historical resistance. —————— 📍The descending triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish. The pattern consist of 2 main elements: a horizontal neckline based on the equal lows, a falling trend line based on the lower highs. ❗️The trigger is a bearish breakout of a neckline of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying at least above the level of the last lower high. 🎯Take profit is the next historical support. 📍Bullish & Bearish Wedges The bullish wedge pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish and the pattern is directed to the downside. The pattern consist of 2 contracting falling trend lines based on the lower lows and lower highs. ❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying below the low of the pattern. 🎯Take profit is the high of the pattern. —————— The bearish wedge pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish and the pattern is directed to the upside. The pattern consist of 2 contracting rising trend lines based on the higher highs and higher lows. ❗️The trigger is a bearish breakout of a support of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying above the high of the pattern. 🎯Take profit is the low of the pattern. 📍Bullish & Bearish Flags The bullish flag pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish and the pattern is directed to the downside. The pattern consist of 2 parallel falling trend lines based on the lower lows and lower highs. ❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying below the low of the pattern. 🎯Take profit is the high of the pattern. —————— The bearish flag pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish and the pattern is directed to the upside. The pattern consist of 2 parallel rising trend lines based on the higher highs and higher lows. ❗️The trigger is a bearish breakout of a support of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying above the high of the pattern. 🎯Take profit is the low of the pattern. 📍Bullish & Bearish Symmetrical Triangles The bullish symmetrical triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish. The pattern consist of 2 contracting symmetrical trend lines based on the higher lows and lower highs. ❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above. 📈The position is opened on a retest. 🔴Stop loss is lying at least below the last higher low of the pattern. 🎯Take profit is the high of the pattern. —————— The bearish symmetrical triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish. The pattern consist of 2 contracting symmetrical trend lines based on the higher lows and lower highs. ❗️The trigger is a bearish breakout of a support of the pattern and candle close below. 📉The position is opened on a retest. 🔴Stop loss is lying at least above the last lower high of the pattern. 🎯Take profit is the low of the pattern. The main difficulty related to trading these patterns is their recognition. You should train your eyes to recognize them on a price chart. Once you learn to do that, I guarantee you that you will make tons of money trading them. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
📊 Chart Pattern CheatsheetChart patterns are visual representations of a stock's price movement over time. These patterns can provide traders with information about the stock's trend, momentum, and potential future direction. Continuation and reversal patterns are two types of chart patterns that traders use to identify potential entry points. When considering entry points for both continuation and reversal patterns, traders often use a combination of technical indicators and price action analysis. They may use tools such as moving averages, oscillators, and trendlines to confirm a pattern's validity and identify potential entry points. Additionally, traders may set stop-loss orders to manage risk and limit potential losses. 🔹 Continuation patterns Continuation patterns are chart patterns that suggest that the current trend will continue. They occur when the stock price consolidates in a certain range, showing a temporary pause in the trend. Some common continuation patterns include triangles, flags, and pennants. Traders may look to enter a long position when the stock price breaks out of the pattern, typically on higher than average trading volume. 🔹 Reversal patterns Reversal patterns, on the other hand, suggest that the current trend is likely to reverse. These patterns occur when the stock price has reached a high or low point and is likely to move in the opposite direction. Some common reversal patterns include head and shoulders, double tops and bottoms, and the "V" pattern. Traders may look to enter a short position when the stock price breaks below a support level or the neckline of a pattern. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
7
How to understand the falling wedge and rising wedgeHello dear traders, Here are some educational chart patterns you must know in 2022 and 2025. I hope you find this information educational and informative. We are new here so we ask you to support our views with your likes and comments, Feel free to ask any questions in the comments, and we'll try to answer them all, folks. What Is a Wedge? A wedge is a price pattern marked by converging trend lines on a price chart. The two trend lines are drawn to connect the respective highs and lows of a price series over the course of 10 to 50 periods. The lines show that the highs and the lows are rising or falling at differing rates, giving the appearance of a wedge as the lines approach a convergence. Wedge-shaped trend lines are considered useful indicators of a potential reversal in price action by technical analysts. Understanding the Wedge Pattern:- A wedge pattern can signal either bullish or bearish price reversals. In either case, this pattern holds three common characteristics: first, the converging trend lines; second, a pattern of declining volume as the price progresses through the pattern; third, a breakout from one of the trend lines. The two forms of the wedge pattern are a rising wedge (which signals a bearish reversal) and a falling wedge (which signals a bullish reversal). Falling Wedge pattern:- When a security's price has been falling over time, a wedge pattern can occur just as the trend makes its final downward move. The trend lines drawn above the highs and below the lows on the price chart pattern can converge as the price slide loses momentum and buyers step in to slow the rate of decline. Before the lines converge, the price may breakout above the upper trend line. When the price breaks the upper trend line, the security is expected to reverse and trend higher. Traders identifying bullish reversal signals would want to look for trades that benefit from the security’s rise in price. Rising Wedge pattern:- This usually occurs when the security's price has been rising over time, but it can also occur in the midst of a downtrend. Trend lines drawn above and below a price chart pattern can converge to help a trader or analyst anticipate breakout reversals. While the price can break out of either trend line, the wedge pattern has a tendency to break out from the trend line in the opposite direction. Therefore, the ascending wedge pattern indicates a higher probability of further downside in the price after the breakdown of the lower trend line. Traders can enter bearish trades on the basis of a charted security after a breakout, either by selling the security short or by using derivatives such as futures or options. These trades will seek to profit from the possibility of a fall in prices. Trading Profits for the Wedge Pattern:- As a general rule, price pattern strategies for trading systems rarely produce returns that outperform buy-and-hold strategies over time, but some patterns nevertheless appear to be useful in predicting general price trends. Huh. Some studies suggest that a wedge pattern will break out toward reversal (a bullish breakout for falling wedges and a bearish breakout for rising wedges) more than two-thirds of the time, with a falling wedge being followed by a rising wedge. Is a more reliable indicator than the wedge. , Because wedge patterns converge in a smaller price channel, the distance between the price at the entry of the trade and the price for the stop loss is relatively smaller than at the beginning of the pattern. This means that the stop loss can be placed closer to the time the trade is initiated, and if the trade is successful, can result in a return greater than the amount of risk initially placed on the trade. Wedge a Continuation or a Reversal Pattern:- The wedge pattern signals a reversal. The reversal is either bearish or bullish, depending on where the trend line meets, what the trading volume is, and whether the wedge is falling or rising. Trade with care. If you like our content, please feel free to support our page with a like, comment Hit the like button if you like it and share your charts in the comments section. Thank you
COINBASE:BTCUSDEducation
by CryptoSanders9563
13
📈 4 Common Bullish Patterns🟢 RISING THREE "Rising three methods" is a bullish continuation candlestick pattern that occurs in an uptrend and whose conclusion sees a resumption of that trend. This can be contrasted with a falling three method. The first bar of the pattern is a bullish candlestick with a large real body within a well-defined uptrend. 🟢 FALLING WEDGE The falling wedge pattern occurs when the asset’s price is moving in an overall bullish trend before the price action corrects lower. Within this pull back, two converging trend lines are drawn. The consolidation part ends when the price action bursts through the upper trend line, or wedge’s resistance. 🟢 BULL PENNANT A pennant is a type of continuation pattern formed when there is a large movement in a security, known as the flagpole, followed by a consolidation period with converging trend line. Pennants, which are similar to flags in terms of structure, have converging trend lines during their consolidation period and last from one to three weeks. 🟢 ASCENDING TRIANGLE An ascending triangle is a chart pattern used in technical analysis. It is created by price moves that allow for a horizontal line to be drawn along the swing highs and a rising trendline to be drawn along the swing lows. The two lines form a triangle. Traders often watch for breakouts from triangle patterns. The breakout can occur to the upside or downside 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
Education
by QuantVue
30
Forget about chart patterns! Hello, my dear friends and happy New Year! I wish you to be healthy and reach all your goals in trading and not only! Never give up on this difficult way which we are going to overcome together! Today we have a very important topic. How to use Elliott waves instead of classical chart patterns. This is the natural exposure why the chart patterns are garbage. I remember my third year at university when we have the trading lessons. Our teacher gave us a lot of useless knowledges about support, resistance and chart patterns. I have not understood why it should working and it was not soo intereting subject for me. That’s why I returned back to trading much later using self-education. Now I have the clear understanding why Elliott waves is the best tool and why it’s working. Most of traders even don’t understand that chart patterns is just the special case of Elliott waves. That’s why today I decided to explain you how you can change the first one to the second one. Let’s go! Double Top(Bottom) On the chart above I drew the different types of double tops. Generally we have 3 types of this pattern Double top with the second top higher than the first one. In this case we can interpret it in two ways. It could be the classical waves 3, 4, 5 and the corrective wave A at the ending stage. In this case we can anticipate waves B and C. Also it could be the irregular correcton ABC inside wave 4 (rarely in wave 2). In this case we should wait for the wave 5 after that. Traders usually execute short position on the neckline breakdown and suffer when the wave 5 smashed their stop-loss. They are wondering why double top does not working. Double top with the equal highs has the same possible outcomes. The only one difference that correction called flat instead of irregular. Double top with the second top lower than the first one. Here is the most common variant is the end of the ABC correction. In this case we have the low potential for shorting the market becuase the new impulsive wave to the upside can hit all stop losses. Head & Shoulders This is the easiest pattern for analysis. The right sholder usually is the wave 4, the head, obviously is the wave 5 and the right shoulder is the wave B. On the neckline breakdown we have the shorting potential only in the rest part of the wave C. You could correctly count waves and short that the bearish reversal bar of the wave 5 or, as a last resort, at wave B potential top. Shorting at the neckline has sence only if you are sure that the wave B was the the wave 1 of the impulsive wave to the downside if higher degree and now the market is in wave 3. We have to learn how to count waves in a correct way. I would recommend you to read the Trading Chaos book by Bill Williams because it has the best explanation how do waves work. Triangles and Wedges This part is common for all types of triangles (ascending, descending, symmetrical) and wedges (falling and rising). This patterns have the similar structure. If we faced with one of these patterns we have 4 possible scenarios. Triangle in the downtrend after the wave 3. In this case triangle is the wave 4, which is represented as the triangle correction. This correction type consists of 5 waves A, B, C, D and E. When the wave E is finished market will continue it’s move in the direction of a trend, printing the wave 5. The same, but in the uptrend. When the market showed us the 5 waves cycle to the upside and the correction is in progress. Triangle can appears in the wave B. In this case the price will continue the corrective move in the wave C after it’s finished. The same with the downtrend. Guys, of course there are much more types of chart patterns. For example, tripple tops and bottoms and so on. The purpose of this article is giving you another view of the market structure and to motivate you studying the Elliott waves theory. Believe me, it has much more potential than it seems on the first glimplse. Best regards, Ivan ________________________________________________________________________________________________ If you like my educational ideas, please smash the boost button to stimulate me make more quality articles!
Education
by Skyrexio
✅UNDERSTAND THE RISING WEDGE PATTERN✅ ☑️WHAT IS THE RISING WEDGE PATTERN? The rising (ascending) wedge pattern is a bearish chart pattern that signals a highly probable breakout to the downside. It’s the opposite of the falling (descending) wedge pattern (bullish). A rising wedge can be both a continuation and reversal pattern, although the former is more common and more efficient as it follows the direction of an overall trend. The rising wedge consists of two converging trend lines that connect the most recent higher lows and higher highs. In a rising wedge, the lows are catching up with the highs at a higher pace, which means that the lower (supporting) trend line is steeper. ☑️KEY FEATURES • The price action temporarily trades in an uptrend (the higher highs and higher lows) • Two trend lines (support and resistance) that are converging • The decrease in volume as the wedge progresses towards the breakout The third point is seen more as a boost to the validity and effectiveness of the pattern, rather than a mandatory element. And it is applicable either for stocks trading mostly. ☑️SPOTTING THE RISING WEDGE Identifying a rising wedge is not so difficult. As a first step, you should eliminate all types of wedges that are present in the sideways-trading environment. The ascending wedge occurs either in a downtrend as the price action temporarily corrects higher, or in an uptrend. ☑️TRADING THE RISING WEDGE Trading the rising wedge pattern is pretty easy. After we correctly identified the pattern all we need to do is wait patiently for the breakout of the wedge to the downside. After the breakout is confirmed(usually at least a 4H candle needs to close below the broken level) we can place a limit order to short the pair on a pullback giving us a better risk to reward ratio. The correct Stop Loss should be placed above the last higher high established by the wedge before the breakout. What concerns the Take Profit level, it must be based on the technical levels below( If there are any). If not, then we might use Trailing Stop or just choose a minimal acceptable RR of 1:1,5 I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
11
HOW-TO : Auto Chart Patterns UltimateHello All, I have made this video which covers briefly on following points for Auto-Chart-Patterns-Ultimate-Trendoscope 1. Indicator components 2. Detailed settings 3. Few key features 4. Info about trading different patterns included I could not cover alerts in the video due to time constraints. But, alerts is same as that of HOW-TO-Customize-Alerts-in-Auto-Harmonic-Scripts Let me know if you have any question. For trial access and subscription please look at the script page - 'Author's Instructions' section.
TVC:RUTEducation
by Trendoscope
9
REVERSAL AND CONTINUATION PATTERNS ⚡️Chart patterns are visual representations of price action. Chart patterns can show trading ranges, swings, trends, and reversals in price action. The signal for buying and selling a chart pattern is usually a trend line breakout in one direction showing support or resistance is overcome at a key level. Stop losses are usually set on retracement back inside the previous range and profit targets are usually set based on the magnitude of the previous move leading into the pattern. Many people think of chart patterns as bullish or bearish but there are really three main types of chart pattern groups: reversal chart patterns, continuation chart patterns, and bilateral chart patterns. Understanding the differences is important for traders to understand the path of least resistance on a specific chart based on the primary sentiment of the buyers and sellers price action. Well in this article we will discuss the Reversal chart patterns and the Continuation chart patterns. Reversal chart patterns Reversal patterns happen when a chart has a strong break from its current trend and its momentum reverses course. These patterns show that a trend is coming to an end and the price action is moving in a new direction away from the previous range or direction. These patterns go from bullish to bearish or bearish to bullish. They can take longer to develop than other types of chart patterns. Now I'll show you how the 3 Bullish and Bearish patterns shown in the picture in this Education post. Double TOP and BOTTOM: Well for this first pair of patterns, I have already made a very nice and detailed explanation here in Tradingview, follow the link :) Click Below in the picture. Head & Shoulder and Reversal H&S A head and shoulders pattern used in technical analysis is a specific chart formation that predicts a bullish-to-bearish trend reversal. The pattern appears as a baseline with three peaks, where the outside two are close in height, and the middle is the highest. The head and shoulders pattern forms when a stock's price rises to a peak and then declines back to the base of the prior up-move. Then, the price rises above the previous peak to form the "head" and then declines back to the original base. Finally, the stock price peaks again at about the level of the first peak of the formation before falling back down. The head and shoulders pattern is considered one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end and vice versa. and Viceversa the reversal will look like this Reversal Rising Wedge and Falling Wedge A wedge pattern can signal either bullish or bearish price reversals. In either case, this pattern holds three common characteristics: first, the converging trend lines; second, a pattern of declining volume as the price progresses through the pattern; third, a breakout from one of the trend lines. The two forms of the wedge pattern are a rising wedge (which signals a bearish reversal) and a falling wedge (which signals a bullish reversal). Rising Wedge This usually occurs when a security’s price has been rising over time, but it can also occur in the midst of a downward trend as well. Falling Wedge Continuation chart patterns Continuation patterns signal that the current trend is still in place and it’s about to resume going in the same direction after a trading range has formed. These types of patterns usually form consolidations in price action to let buyers and sellers work through supply and demand before moving higher or lower like the previous trend leading into the range. These are the most popular classic bearish and bullish chart patterns. Continuation Falling Wedge The falling wedge pattern is a continuation pattern formed when the price bounces between two downward-sloping, converging trendlines. It will follow the impulse trend, so a Bullish trend will continue in the uptrend and Vice-versa for il downtrend. And Vice versa the Rising Wedge The Bullish and the Bearish Rectangle A rectangle is a pattern that occurs on price charts. A rectangle is formed when the price reaches the same horizontal support and resistance levels multiple times. The price is confined to moving between the two horizontal levels, creating a rectangle. Bullish Rectangle Bearish Rectangle: Bullish and Bearish Pennant In technical analysis, a pennant is a type of continuation pattern formed when there is a large movement in a security, known as the flagpole, followed by a consolidation period with converging trend lines "the pennant" followed by a breakout movement in the same direction as the initial large movement, which represents the second half of the flagpole. Some examples: Hope this post will help you to understand the difference between some examples of the most common reversal and continuation patterns.
Education
by FOREXN1
22
USD/CHF -8/9/2022-• Triangle pattern explained + measurement method • On the weekly chart, while ago, a triangle formation can be seen • Breakout can be either way • In the above case, the breakout was to the upside, supported by strong fundamentals in favor of the dollar • Traders should wait for a successful breakout before placing any trade • Breakout was confirmed by several bars above the upper trend line resistance • Buy order is placed upon the breakout, and the measurement method is applied for profit taking • What is the measurement method? • It is the distance between the lowest point in the triangle and the first high, the widest distance in other words • In this case, the length is 700 pips, so we project this distance from the breakout point • We get the target around parity, which was reached accurately at a later stage
Education
by RamziAbouAbdallah-CMT
Rising/Falling Wedge Ascending Wedge in an uptrend-bearish 1. This pattern occurs when the slope of price candles’ highs and lows join at a point forming an inclinin wedge. 2. The slope of both lines is up with the lower line being steeper than the higher one. 3. Place an order to breakdown and out of the wedge. The drop out of the wedge can be very dramatic. Descending Wedge in a downtrend -bullish 1. This formation occurs when the slope of the price candle high and lows join at a point forming a declining wedge. 2. The slope of both lines is down with the upper line being steeper than the lower one. 3. To trade this pattem, place an order on a break up and out of the wedge.
BINANCE:ETCUSD.PEducation
by yaser_rahmati
1
btc usdt perp ending diagonal tutorialIn this tutorial I'll try and explain how to trade an ending diagonal. You would want to see a market that moves in converging channels(at times these can be too steep like those of rising/falling wedges). Next confirm 5 waves with respect to the channel. Waves 1, 3, 5 should make a triple top, whereas 2 and 4 are joined with one diagonal. Divergences are imperative as well, upon wave confirmation, the RSI divergence should support your bias, in this case, it's a medium bearish RSI, as the price rises, the oscillator remains holding the same region. The guidelines for entries and stop losses are simple. Wait for a break of wave 4's extreme and place the initial stop loss slightly above wave 5. At times there is a retest, which pulls back close to where the extreme of the 5th wave, which is ideal for entries and dcaing. Another approach is entering at wave 5. More often than not, wave 3 of an ending diagonal is shorter than wave 1, and wave 5 is shorter than wave 3, since wave 3 can never be the shortest among 1, 3 and 5. There are a lot of profit taking strategies out there. For this setup, I take profits as a whole rather than fib levels. A typical ending diagonal results in a correction(abc) that completely retraces it (i.e wave c terminates where wave 1 begins). Note: for ellioticians, you'll find that with ending diagonals, wave 4 gets into the territory of wave one, which is valid with ending diagonals and usually this is the case where 1>3 and 3>5. Now this is the setup in summary: 1) entry triggers: - ending diagonal - waves 1 - 5 - RSI divergence - triple top - breakout/breakdown 2) entry: (i) at break of wave 4 (ii) at wave 5 (aggressive approach) If opting for ii, make sure wave 1 is longer than 3 and 5 is shorter than 3 3) stop loss: slightly above wave 5( can be adjusted once significant gains have been made) 4) take profit: wave 2, let the price move till it's the same level as wave 2, otherwise use any profit taking strategy of your choice. 5) enjoy the profits ! That's it for this tutorial, take care and thanks for dropping by :)
Education
by initmx
🔥 Very unique situation is happening for the DYDX 🔥Hello traders 🐺 . As you saw in the title , in this idea I want to talk about this unique situation of the DYDX which in my opinion is very rare and unique in the market specially in the higher time frame like daily and weekly so this could be a very special and profitable trade for you my friends 🚀🔥 . Many of you know about the bullish and bearish divergence and also may know that what this divergence and patterns trying to telling to us ; but there are some traders whos still don't know about this patterns , so I decided to publish this idea and talk more about the bullish and bearish divergence and also talk about the wedge pattern , so this is tutorial content and I hope this be helpful for you my dear friends . wedge patterns : What we have currently in above chart is falling wedge pattern , which is bullishly bias pattern but what does this means ? when we look at the wedge patterns which in this case is falling wedge or broadening channel , we see descending trend lines which are diverging each others , so we can see a something look like channel but the channel trend lines in the wedge patterns are diverging each others . But the important point about the wedge patterns is the story behind them , usually when we have a wedge patterns in the market , if you realize the pattern correctly in the most cased we have a divergence in the RSI , but what does this means for us ? Wedge patterns are type of the exhausting pattern and this means that during this patterns , bigger operator of the market are trying to change the trend but they want to accumulate or distribute during the pattern and we could realize it in the RSI value , because for example in this case we have a falling wedge pattern and as you can see in the chart above we have lower lows in the chart but in the RSI we have a higher lows ; you can see that as price start to drop , RSI start to rise during the pattern and this means that they are accumulating in the lower price but they do it slowly and want to exhaust people from the current situation of the market so they do it slowly and didn't push the price in one single move , because in that case they can't buy any more in this lower prices . ok guys I hope this tutorial be helpful for you , but I think now it's time to talk about the DYDX situation . As you can see in the chart , we have the exact same thing for DYDX , and in my opinion this is a very unique situation in the market because this pattern is formed in the higher time frame like daily or weekly . because of the type of this idea I can't talk more about the price targets because this is a tutorial idea and in this type of idea we have to educate people , not talk about the price targets or long and short trades , so make sure to follow me to see my next analysis about DYDX .
Education
by Kiu_Coin
5