Rising and Falling Wedges Explained
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Today, we'll explore two important ones: the Rising Wedge and the Falling Wedge. These patterns can signal shifts in market trends. Let's dive in and see how they work.
Rising Wedge:
In an uptrend, the Rising Wedge hints at a bearish turn. It takes shape as prices find a middle ground between two upward-sloping lines, one as support and the other as resistance, both inching closer. As the price inches towards the wedge's tip, its upward push tends to fade, suggesting a potential shift to a downward trend.
Falling Wedge:
Unlike the Rising Wedge, the falling wedge spells optimism in a downtrend. It emerges as prices consolidate between two downward-sloping lines, one providing support and the other resistance, both drawing nearer. As prices approach the wedge's apex, the downward momentum loses steam, hinting at a potential shift towards an upward trend.
Feel free to let us know your thoughts and if you have any questions. Your feedback is valuable and helps us improve. Happy trading!
Today, we'll explore two important ones: the Rising Wedge and the Falling Wedge. These patterns can signal shifts in market trends. Let's dive in and see how they work.
Rising Wedge:
In an uptrend, the Rising Wedge hints at a bearish turn. It takes shape as prices find a middle ground between two upward-sloping lines, one as support and the other as resistance, both inching closer. As the price inches towards the wedge's tip, its upward push tends to fade, suggesting a potential shift to a downward trend.
Your sell signal triggers with a bearish break beneath the wedge's support.
Set a stop loss just above the wedge's highs.
Aim for the next significant support level.
Falling Wedge:
Unlike the Rising Wedge, the falling wedge spells optimism in a downtrend. It emerges as prices consolidate between two downward-sloping lines, one providing support and the other resistance, both drawing nearer. As prices approach the wedge's apex, the downward momentum loses steam, hinting at a potential shift towards an upward trend.
Your buy signal activates with a bullish breakout beyond the wedge's resistance.
Place a stop loss just below the wedge's lows.
Target the next notable resistance.
Feel free to let us know your thoughts and if you have any questions. Your feedback is valuable and helps us improve. Happy trading!
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