Falling Wedge PatternFalling wedge pattern is a reversal chart pattern that changes bearish trend into bullish trend.
Wedge
Wedge Pattern TradingRising Wedge Pattern is a trend reversal chart pattern that that indicates gradually decrease in market momentum.
if it is traded with confluence like a supply or resistance level then Winning probability of this setup will increase.
Top 10 Patterns ( Wedge Patterns ) #3Example on daily Aud/Jpy pair of a Wedge Pattern ( can be falling wedges and on any time frames):
Wedge patterns are of two types, falling wedge as well as the rising wedge. While the falling wedge is associated with bullish reversals, the rising wedge is seen as a bearish reversal indicator.
The wedge pattern has over three properties that a trader needs to look for if hunting for it on their charts.
Converging trend lines.
Decline in volume while the price is progressing through the pattern.
A breakout from any of the trend lines.
You can spot the rising wedge, usually when a currency's price has been climbing over a reasonable period. However, they have been known to form during a currency price's downward trend as well.
As for the falling wedge, it has been observed to form correctly when a currency's price has been on a decline for a while. The pattern's hot spot is just when the market trend is in its final plunge.
Of the two, the falling wedge has been noted to be more reliable than the rising wedge in terms of predicting the market's price trend.
EDUCATION - Rising & Falling Wedges - Reversal PatternsWhat is an ascending/descending correction?
The most common reversal pattern is the rising and falling wedge, which typically occurs at the end of a trend. The pattern consists of two trendiness which contract price leading to an apex and then a breakout appears.
Rising Wedge – Bearish Reversal
The ascending reversal pattern is the rising wedge which consists of higher highs and higher lows whilst losing momentum to the upside. Price contracts and eventually has a bearish break.
Falling Wedge – Bullish Reversal
The falling wedge reversal pattern occurs at the end bear run and indicates that price is ready to reverse. Again, price contracts and then eventually breaks out upwards.
There are 2 types of ways we can trade wedge patterns; Risky Entry & Safe Entry. See below for the pros and cons for both and how to enter them
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Risk Entry:
The reason why it is called a risk entry is because we haven't got many confirmations apart from the third touch of the trendline (as indicated in the chart above). Price may have the potential to go past the trendline for a deeper correction before moving up hence why this is called a risk entry. Whereas for the safe entry, the confirmation would be the break of the wedge.
How to trade using Risk Entry:
Wait for price to bounce off the trendline and then enter with stops below/above the correction depending on whether it’s a rising wedge or falling wedge.
One of the advantages of doing a risk entry is that we can have small stop loss and have a great risk:reward ratio. Also, we can gain an entry at the start of the move and have massive gains!
Safe Entry:
Safe entry requires more than one confluence and requires confirmation. One of the confirmations of the safe entry is the third touch bounce and then another confirmation is when price breaks the correction which confirms that the structure has changed and that we are in a reversal.
How to trade using Safe Entry:
For a safe entry, enter when price has broken the correction with stops above/below the correction. Please note that with this entry method, the stoploss will be greater.
The disadvantage to using a safe entry is that we require a bigger stop loss which makes the risk:reward ratio not as great as the risk entry. However, the probability of the trade succeeding is higher.
RISING WEDGE EXAMPLES
RISK ENTRY
SAFE ENTRY
FALLING WEDGE EXAMPLES
RISK ENTRY
SAFE ENTRY
EDUCATION - Rising & Falling Wedges - Reversal PatternsWhat is an ascending/descending correction?
The most common reversal pattern is the rising and falling wedge, which typically occurs at the end of a trend. The pattern consists of two trendiness which contract price leading to an apex and then a breakout appears.
Rising Wedge – Bearish Reversal
The ascending reversal pattern is the rising wedge which consists of higher highs and higher lows whilst losing momentum to the upside. Price contracts and eventually has a bearish break.
Falling Wedge – Bullish Reversal
The falling wedge reversal pattern occurs at the end bear run and indicates that price is ready to reverse. Again, price contracts and then eventually breaks out upwards.
There are 2 types of ways we can trade wedge patterns; Risky Entry & Safe Entry. See below for the pros and cons for both and how to enter them
__________________________________________________________________
Risk Entry:
The reason why it is called a risk entry is because we haven't got many confirmations apart from the third touch of the trendline (as indicated in the chart above). Price may have the potential to go past the trendline for a deeper correction before moving up hence why this is called a risk entry. Whereas for the safe entry, the confirmation would be the break of the wedge.
How to trade using Risk Entry:
Wait for price to bounce off the trendline and then enter with stops below/above the correction depending on whether it’s a rising wedge or falling wedge.
One of the advantages of doing a risk entry is that we can have small stop loss and have a great risk:reward ratio. Also, we can gain an entry at the start of the move and have massive gains!
Safe Entry:
Safe entry requires more than one confluence and requires confirmation. One of the confirmations of the safe entry is the third touch bounce and then another confirmation is when price breaks the correction which confirms that the structure has changed and that we are in a reversal.
How to trade using Safe Entry:
For a safe entry, enter when price has broken the correction with stops above/below the correction. Please note that with this entry method, the stoploss will be greater.
The disadvantage to using a safe entry is that we require a bigger stop loss which makes the risk:reward ratio not as great as the risk entry. However, the probability of the trade succeeding is higher.
RISING WEDGE EXAMPLES
RISK ENTRY
SAFE ENTRY
FALLING WEDGE EXAMPLES
RISK ENTRY
SAFE ENTRY
Falling Wedge
Prior Trend: To qualify as a reversal pattern, there must be a prior trend to reverse. Ideally, the falling wedge will form after an extended downtrend and mark the final low. The pattern usually forms over a 3-6 month period and the preceding downtrend should be at least 3 months old.
Upper Resistance Line: It takes at least two reaction highs to form the upper resistance line, ideally three. Each reaction high should be lower than the previous highs.
Lower Support Line: At least two reaction lows are required to form the lower support line. Each reaction low should be lower than the previous lows.
Contraction: The upper resistance line and lower support line converge to form a cone as the pattern matures. The reaction lows still penetrate the previous lows, but this penetration becomes shallower. Shallower lows indicate a decrease in selling pressure and create a lower support line with less negative slope than the upper resistance line.
Resistance Break: Bullish confirmation of the pattern does not come until the resistance line is broken in convincing fashion. It is sometimes prudent to wait for a break above the previous reaction high for further confirmation. Once resistance is broken, there can sometimes be a correction to test the newfound support level.
Volume: While volume is not particularly important on rising wedges, it is an essential ingredient to confirm a falling wedge breakout. Without an expansion of volume, the breakout will lack conviction and be vulnerable to failure.
How to trade with Falling wedge pattern-Live exampleFalling wedge pattern's considered as continuation pattern (Bullish continuation pattern) We can catch this pattern
after some bullish reversal or in a continuous bullish run.Best place to enter bullish was after the break of the upper side trend line
(After converging).The primary target would be the topmost rejection level of the wedge and we can fix our extended target with the help
of Fibonacci.
What is a falling wedge?A falling wedge is a bullish chart pattern (said to be "of reversal"). It is formed by two converging bearish lines.
A falling wedge is confirmed/valid if it has a good oscillation between the two falling straight lines. The upper line is the resistance line; the lower line is the support line.
Each of these lines must have been touched at least twice to validate the pattern.
A break of the resistance line definitively validates the pattern. This break out is generally accompanied by high volumes. The price objective is determined by the highest point that caused the wedge to form.
NB: it is often observed that the steeper the falling wedge’s trend lines, the faster the price objective is reached.
For XRP this is of course a load of crap, but it keeps me from jumping into a pool filled with great whites...
HOW TO TRADE WEDGE PATTERNS IN A RIGHT WAY This is an Educational post regarding ' HOW TO TRADE WEDGE PATTERNS IN RIGHT WAY '
1. There should be a nice uptrend or downtrend before you start marking the pattern
2. join the most touches of body candle or wicks as per your trading style and what works for you
3. If a Fakeout has happened then most the chances of pattern to work increases
4. check the volume of recent price
5. always pay closer attention to price when price is near to the breakout
6. Always look for good body momentum candle breakout with good volume
7. aggressive traders can enter after the breakout
8. I always buy on the retest of the resistance level which became support or vice versa for short trade
9. Use your personal favorite indicator to add confluence to the trade
Do let me know if you learned anything from this post
How to trade wedge patterns? An example based on EURUSD chartWedge Patterns are a type of chart pattern that is formed by converging two trend lines.
Wedge patterns can indicate both continuation of the trend as well as reversal.
Rising Wedge- On the left upper side of the chart, you can see a rising wedge.
Rising wedges usually form during an uptrend and it is denoted by the formation higher highs(HHs) and Higher Lows(HLs).
This pattern gives traders the opportunity to take short positions in the market.
When price breaks out of the lower Trend Line(TL) of the wedge, a trader can execute a short position.
Falling Wedge - On the left lower side of the chart, you can see a falling wedge.
Falling wedges when formed during a downtrend is a reversal pattern and it denoted by the formation of lower lows(LLs)
and lower highs(LHs).
If you notice this pattern during a downtrend, it usually indicates that the downtrend is losing momentum and buyers
are stepping into the market gradually.
When price breaks out of the upper TL, one can execute a buy trade.
On the right side, you can see the recent EUR/USD chart. The wedge pattern in this particular chart is the Broadening Wedge
Traders can trade this pattern by taking short positions whenever bearish price action takes place in the upper TL of the wedge.
On the other hand, buy trades can be executed on the lower trend line of the wedge.
Educational ContentIn this example, we can see that this is a typical trend continuation move.
1. Bullish impulse leg, followed by a "Consolidation before breakout".
2. For those who trade with SMC = Smart Money Concept, you will identify the breakout zone as an ORDER BLOCK .
3. Prices made a Swing High, followed by a "FALLING WEDGE" pattern, forming liquidity beneath the minor swing lows while approaching the ORDER BLOCK .
4. 1st Buy Entry would be at "OB1 - PRIMARY ZONE".
5. 2nd Buy Entry would be a classic "Breakout Retest" retail trading technique.
This is how you combine Retail Logic with Smart Money Concept.
Top Chart Patterns -- 20 Patterns Will Make You Pro Trader Hi All Trader's -- We Have Today New Education Lesson For ( Top Chart Patterns )
1- Symmetrical Triangle Pattern
2- Ascending Triangle Pattern
3- Inverse Head And Shoulders Pattern
4- Cup And Handle Pattern
5- Falling Wedge
6- Symmetrical Triangle Pattern ( Bearish )
7- Ascending Triangle Pattern ( Bearish )
8- Head And Shoulders
9- Inverse Cup And Handle
10- Rising Wedge
11- Rectangle
12- Flag
13- Pennant
14- Double Bottom
15- Triple Bottom
16- Rectangle ( Bearish )
17- Flag ( Bearish )
18- Pennant ( Bearish )
19 - Double Top
20- Triple Top
Thanks For Browsing My Lesson And Hope You Still Profit Always ♥
Elliott wave diagonalHello guys :)
Today I'm going to teach you what diagonal wave is. The normal wave counts like 53535 but this wave has 33333 waves.
Most ending diagonals have a wedge shape like this one.
Follow me for more tutorials.
Cheers :)
Does news events affect price action analysis in trading ?Hello everyone:
Today I want to discuss news events in trading. Often when a news event comes out in the market, we get some sort of volatility and we get a strong spike/impulse.
However, does news events affect our ways of understanding price action analysis ?
Let's take a look at a few examples of the recent FOMC volatility that happened in the forex, indices and commodity market.
Most of the market had a sharp quick move to one direction, hinting a sign of weakness in USD/JPY..etc.
However, all of them ended up with a reversal impulse, and recovered all the price from the volatility.
So, what can we take away from this ? News certain creates volatility, but not the overall price action trending direction.
We may get a temporary short term move, but eventually the market recovers it, and resumes its original direction.
Often beginner/newcomer traders will try to “jump” onto the news momentum, but usually end too late, and they will take a BE or losses.
We can not control the outcome of the news or whether the news will be positive or negative towards our trades, but what we can control is our entry, SL, TP, risk management, emotions and mindset.
Any questions, comments or feedback welcome to let me know :)
Thank you
Jojo
Guideline of Diagonal with Elliot WavesCan you spot this beautiful pattern from gold recent weeks movement? Follow us and get the latest update about this pattern later in the day!
How to Trade Diagonal Like a ProHere you find some guidelines for entry and initial protective stops for ending diagonal. We will publish more about how to integrate diagonals in Elliot Waves if we get 50 likes!
Hint: Can you spot this pattern in gold now? Check out our ideas if you don't!
Bitcoin Triangle Trading: Do they work?One of my followers on Tradingview pointed out that there is an abundance of ideas about the TRIANGLE on Bitcoin. It's great the pass the time drawing pretty pictures but can traders actually make money from them?
Description of the Wedge PatternsHi every one
The wedge pattern can be used as either a continuation or reversal pattern, depending on where it is found on a price chart. There are two types of wedge pattern: the rising (or ascending) wedge and the falling (or descending wedge).
1-Identifying the rising wedge pattern in an uptrend :
A rising wedge in an uptrend is considered a reversal pattern that occurs when the price is making higher highs and higher lows. As the chart Pattern number one shows, this is identified by a contracting range in prices. The price is confined within two lines which get closer together to create a pattern. This indicates a slowing of momentum and it usually precedes a reversal to the downside. This means that you can look for potential selling opportunities.
-Identifying the rising wedge pattern in an downtrend :
A rising wedge in a downtrend is a temporary price movement in the opposite direction (market retracement). As in the case of a rising wedge in a uptrend, it is characterised by shrinking prices that are confined within two lines coming together to form a pattern. It indicates the continuation of the downtrend and, again, this means that you can look for potential selling opportunities.
2-Falling wedge :
The falling (or descending) wedge can also be used as either a continuation or reversal pattern, depending on where it is found on a price chart. This lesson shows you how to identify the pattern and how you can use it to look for possible buying opportunities.
-Identifying the falling wedge pattern in a downtrend:
If the falling wedge appears in a downtrend, it is considered a reversal pattern. It occurs when the price is making lower highs and lower lows which form two contracting lines. The falling wedge usually precedes a reversal to the upside, and this means that you can look for potential buying opportunities.
-Identifying the falling wedge pattern in an uptrend:
A falling wedge found in an uptrend is considered a continuation pattern that occurs as the market contracts temporarily. It indicates the resumption of the uptrend. Again, this means that you can look for potential buying opportunities.
Traders, if you liked this idea or have your opinion on it, write in the comments, We will be glad.
Thank you for seeing idea .
Have a nice day and Good luck.
Ascending Broadening Wedges V Parallel Channels Simply switch this LINKUSD chart between the log and linear scale to see an ascending broadening wedge turn into a parallel channel. A nice example of this perspective.
Wedges Pattern by Rocket Bomb 🚀💣Hello, my dear friends! As I promised, today we are talking about Wedges Patterns!
Link on a good view👇🏻
Wedges are some of the main classical figures in technical analysis . There are two types of wedges:
- Rising Wedge pattern - both sides of the figure are directed up;
- Falling Wedge pattern - both sides of the figure are directed down.
✔A rising wedge pattern is formed when price increases slow and a tapering pattern forms. Price can't go longer rise further, but at the same time, as if they continue to gradually update local highs. That's suggests, that the pressure of sellers (bears) is gradually increasing in the market.
✔A downward wedge pattern is formed when price decline slows down and a tapering pattern is formed, and volume indicators gradually decrease. Prices are no longer able to decline further, but at the same time, as if they continue to gradually update local lows. That's suggests, that the pressure of buyers (bulls) is gradually increasing in the market.
💡My picture shows, that the “Wedge” directed 👇🏻 down is a bullish 🐃 model, since the trend is up and the price has broken the resistance line (went up).
And the “Wedge” directed up ☝🏻is a bearish 🐻 model, as the trend is directed down and the price has broken through the support line (went down).
These signals are strong and YOU can trade on them.
💣But if the price in both cases would go in the opposite direction (the opposite direction to the trend), then this would be a weak signal. Trading in this case is not recommended, as it's too risky. 🙅🏻♀️
Guys, thanks for reading me!🙏🏻
Subscribe and stay with me forever🧡
I'm appreciate Your support🥰
Your Rocket Bomb🚀💣
PS : 👇🏻👇🏻👇🏻Below I put links on my previous ideas 👇🏻👇🏻👇🏻
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Stacks 2.0 is coming at the same time as MainNet. Stakers will earn BTC while stacking STX after Stacks 2.0. You can confirm it from Blockstack's official announcements.
Now, let's look at the chart. I'm observing triple bottom formation. Also STX in oversold zone. Indicators which in oversold zone are Bollinger Bands %B , Relative Momentum Index, Relative Strength Index.
My discourses, my analysis and my drawings are definitely not investment recommendations. Cryptocurrency trading involves high market risk. Please take care of your transactions. My analysis is for educational purposes, I am not responsible for your losses.
AUDNZDAUDNZD is still following our previous analysis. The best thing about swing trading is that you can add more entries as the price retraces.
SOYBEAN Higher Time Frame Outlook on structureHello traders:
Looking at soybeans from the higher time frame perspective and its price action structures.
We see strong bearish impulse down from mid of 2018, and has been in this larger channel like structure ever since.
Price has been consolidating for these few years, and finally breaking to the top in the recent times.
What I like about the price from a structure point of view is that we just broke the previous top, but on the lower time frame the price broke up in a corrective structure.
I see this type of price action over and over again. Price breaks up, catching a lot of buyers, then see a strong sell momentum down.
I wouldn't be surprise to see some bearish impulse from the lower time frame, to bring the price right back into this larger channel structure, and we can potentially see the next bearish move from the top.
For now, happy to be a bit more patient, and wait for price to develop a bit more.
thank you
