![]() ![]() The rising and falling wedges help us in predicting the reversals of the trends that help the traders in making appropriate trading decisions. There are two types of wedge pattern: the rising (or ascending) wedge and the falling (or descending wedge). The profit target is set by measuring the height of the back of the wedge and extending that distance up from the trend line breakout. The wedge pattern can be used as either a continuation or reversal pattern, depending on where it is found on a price chart. The stop loss is usually placed below the back of the wedge. In order to form a descending wedge, both the support and resistance lines have to point downwards and the resistance line should be steeper than the line of support.īelow is an example of Falling Wedge formed in daily chart of BSE Sensex:īelow is an example of Rising Wedge formed in weekly chart of Sundaram Finance ltd.: The falling wedge chart pattern formed when a market consolidates between two converging trend lines i.e. In order to form a rising wedge, both the support and resistance lines have to point upwards and the support line should be steeper than resistance. The rising wedge chart pattern is formed when a market consolidates between two converging trend lines i.e. ![]() Once there is price breakout, there is a sharp movement of prices in either of the directions. This pattern can be drawn by using trend lines and connecting the peaks and the troughs. Rising wedge occurs when the price of the stock is rising over a time whereas falling wedge occurs when the price of the stock is falling over a time. The price action forms a cone that slopes down or up as the reaction highs and reaction lows converge. It can be in the form of a rising wedge or a falling wedge. Wedges can be Rising Wedges or Falling wedges depending upon the trend in which they are formed. Wedges are the type of continuation as well as the reversal chart patterns. Rising (or ascending) wedges don’t just look like the opposite of falling ones. ![]() A market’s highs and lows form support and resistance lines that are both rising but point towards one another, indicating a period of consolidation. Wedges are bullish and bearish reversal as well as continuation patterns which are formed by joining two trend lines which converge. A wedge pattern is a type of chart pattern that is formed by converging two trend lines. The rising wedge pattern is a formation that looks like the opposite of a falling wedge. Next, we will learn a completely different type of chart pattern called Wedges. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |