PRICE ACTION TRADING | RISING WEDGE PATTERN 🔰
Updated: Jul 26, 2022
Rising wedge pattern is one of the most accurate price action patterns.
Being relatively simple to recognize, it is applied in various trading strategies.
⭐️The pattern itself signifies the exhaustion of bulls.
Even though the asset keeps growing in value, the price action legs contract forming a narrowing channel.
Being stuck between two contracting trend lines , one serving as support and one serving as resistance, the price forms a wedge pattern.
🔔The trigger that we are looking for to sell the market is a bearish breakout of the support of the wedge (candle close below).
To not be caught by a false breakout, it is highly recommendable to wait for a bearish violation of the last higher low level as well.
Only then the wedge breakout is confirmed.
⚡️Trading the market aggressively, one opens a short position on spot just after the candle closes.
⚡️The conservative trader will wait for a retest of the broken support of the wedge though for a safer entry.
✔️Safest stop will lie strictly above the highest wick within the wedge .
✔️Initial target will be based on the closest key structure support .
Learn to recognize this pattern and be disciplined to wait for its confirmed breakout. Only then a high trading performance will be achieved.
What price action pattern do you want to learn in the next post?