The Aussies: Mind the Wedges!I show what happened after two wedge formations. Note carefully wedges do not rule the market. The create probabilities not predictions. Wedges do fail.
There is hardly ever a perfect wedge pattern. The most recent one doesn't look too great. Price can fall out of a wedge and rock back in as you will see. Therefore trendlines drawn have to be estimates.
From experience only, recovery from the base of wedges - when the happen tend to get closer to the notional apex of the wedge or exceed them. As I said, there is no rule - because these formations do not rule the markets.
Wedges often don't work. These descending wedges shown are in a bull market, hence the expectation is for price to recover. This market could be collapsing when looked at from a higher time frame. Therefore, I do not expect a good retracement up on the most recent wedge. But I'm always happy to be surprised. My strategy here, is to follow a 5 to 10 min trend up as far as it will go. That means, no targets.
I am aware of much that has been written about wedges out there by many a guru. I do my own thing with these formations. I also know that wedges go by different names. Call it what you want - the important issue is the general shape. I am not a wedge expert.
Disclaimers : This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions. No predictions and no guarantees supplied or implied. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
