Descending wedge4/8/2023 When it comes to timeframes, you all know I’m an advocate of trading four hourly charts and higher, and this is no different. In short, to trade a wedge pattern we wait for the market to break through our support or resistance lines, with price typically breaking to the opposite direction as the wedge itself. Without this, the patterns cannot be considered tradable. With both rising and falling wedge patterns, it’s vital that both the support and resistance lines of the wedge have at least three touches from price. The falling wedge setup is the exact inverse of the rising wedge with price likely to break to the upside. If price doesn’t respect either the upper or lower trendline then the pattern is not a valid setup. You’ll also notice that all these lows and highs are connected by a trendline which is key for wedge patterns. You’ll notice that a rising wedge takes shape when the Forex market is making higher highs and higher lows. The below image illustrates the traits of a rising wedge pattern. 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. Much the same as other wedge patterns, they’re formed by a consolidation period representing either distribution or accumulation. One of the first things to know about rising and falling wedge patterns, is that they’re a great indicator of an upcoming reversal. So, let’s define what a wedge pattern is. But why so? Well, wedge patterns tend to offer some of the most precision entries as well as some of the most attractive R-multiples in terms of measured-move target areas. When talking about reversal patterns in Forex trading, few are more familiar or widely-known than rising and falling wedges.
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