![]() Trading Tip – A falling wedge formation can be traded as a reversal pattern but it is usually better to trade it as a continuation pattern that is created as a result of a decrease in volume in well established uptrends where it can mark the halfway point of a major move. Whether the wedge appears in the middle of a price move as a continuation signal, or at the end of the move as a reversal, a rising wedge is followed by a downtrend and a falling wedge is followed by an uptrend most of the time. ![]() Even if a wedge acts a continuation pattern, the basic rules still apply: breakouts happen downwards for a rising wedge. ![]() Their bearish bias is all the more pronounced since they are completed after a long period of time following a clear uptrend.Īs a general rule, continuation wedges tend to complete more quickly than reversal wedges.
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