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Falling and Rising WedgesOne of the first things to know about rising and falling wedge patterns, is that they’re a great indicator of an upcoming reversal. Much the same as other wedge patterns, they’re formed by a consolidation period representing either distribution or accumulation. While both rising and falling wedges can form over a period of any length, typically the longer the consolidation period, the more explosive the breakout will be when it eventuates A Falling Wedge is a chart pattern within the context of a downtrend composed of two downward sloping and converging trendlines connecting a series of lower swing/pivot highs and lower swing/pivot lows. The power of a Falling Wedge can be greater after a moderate downside move due to the possible decrease of overhead resistance as the pattern is formed. Falling Wedges can be stronger when the series of lower swing/pivot highs and lower swing/pivot lows that formed the pattern narrow down into a point/apex as bears become less interested in selling. 2)A Rising Wedge is a chart pattern within the context of an uptrend composed of two upward sloping and converging trendlines connecting a series of higher swing/pivot highs and higher swing/pivot lows. The power of a Rising Wedge can be greater after a moderate upside move due to the possible decrease of underlying support as the pattern is formed. Rising Wedges can be stronger when the series of higher swing highs and higher swing lows that formed the pattern narrow down into a point/apex as bulls become less interested in buying.
COINBASE:BTCUSDEducation
by CryptoC77
Bearflag and Bearish pennantA Bear Flag is a price action within the context of a downtrend that produces an orderly price increase consisting of a narrow trend range comprised of higher swing/pivot highs and higher swing/pivot lows. The success of a Bear Flag can be greater after a significant downside move due to the possible increase of overhead resistance. Bear Flags can be stronger when the swing low that begins the pattern is also an all time low due to the possible lack of underlying support. Target of bearflag is the lenght of flagpole and you need to measure this lenght for breakdown target from support line of Flag(wait till this support line will be broke and after you can entry) Bearish pennant: The initial sell-off into the pennant can be steep or gradual. The Pennant represents a pause to consolidate, retracing a small part of the initial sell-off within a tight channel. A break-down from this channel is the first hint that a bearish pennant could be in the making. Once the shares break down from the pennant, it is possible that another sell-off – the same size as the first Target of bearpennant is the same like in bearflag,measure lenght of flagpole and this lenght from pennant support line will be the target
BITSTAMP:BTCUSDEducation
by CryptoC77
1
Double bottom and Double topThe Double Bottom Reversal is a bullish reversal pattern typically found on bar charts, line charts, and candlestick charts. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in-between. It is important to remember that the Double Bottom Reversal is an intermediate to long-term reversal pattern that will not form in a few days. Even though formation in a few weeks is possible, it is preferable to have at least 4 weeks between lows. Bottoms usually take longer than tops to form and patience can often be a virtue. Give the pattern time to develop and look for the proper clues Double top is a chart pattern, characterized by two consecutive peaks in price, that signals a potential bearish reversal of an uptrend. The double top chart pattern is considered to be an indicator of an intermediate- or long-term reversal in price. After two attempts by bulls to push the price above key resistance levels, many bulls may capitulate and bears often take control over the market price.
COINBASE:BTCUSDEducation
by CryptoC77
Bull Flag and Bullish PennantFlags and pennants are continuation patterns. They are traded in the same way, but each has a slightly different shape. The terms flag and pennant are often used interchangeably. A flag or pennant pattern forms when the price rallies sharply, then moves sideways or slightly to the downside. This sideways movement typically takes the form or a rectangle (flag) or a small triangle ( pennant ), hence their names. Draw trendlines along the highs and lows of the sideways price action. The sharp price rise preceding the flag or pennant is called the flag pole. The sideways period is often followed by another sharp rise. This is where the trading opportunity comes in. Once the flag pole and a flag or pennant have formed, traders watch for the price to breakout above the upper flag/pennant trendline . When this occurs, enter a long trade. Target 1: Size of the Flag The first target of a confirmed Flag pattern can be derived using the measured move technique. The measured move target is a distance equal to the size of the flag. To measure the size of the flag, you would just take the vertical distance between the upper and the lower channel within the flag. Then you would apply this distance starting from the breakout point. Your first target is located at the end of this distance. Target 2: Size of the Pole The next target of the Flag formation equals the size of the Flag Pole. So, to get this target 2, you need to measure the vertical distance between the high and the low of the Pole. Once you get that distance, you will need to apply it to the pattern. Again, as we did with Target 1, you would apply it starting from the breakout point. Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation, and resumption to augment the robustness of pattern identification.
COINBASE:BTCUSDEducation
by CryptoC77