Rising wedge pattern bull market series#

Here is how you can identify the rising wedge pattern in five easy steps – It occurs during rising markets and reverses into falling prices thereafter. The rising or expanding wedge chart pattern indicates a market downtrend reversal. Long the trade at this point to benefit from the rising markets. Identify the existing trend in the market to be a downtrend.Ĭonnect the lower low and lower high price points to get two downward sloping lines that converge during a downtrend.Ĭalculate the divergence between the current trading price of the currency pairs and the trendlines to see how much the market has deviated from the price highs and lows.Ĭonfirm the downtrend when the currency pair price moves below the support level and finally reveres and reverses into an uptrend. Here is how you can identify the falling wedge pattern in five easy steps – It occurs during falling markets and reverses into increasing prices thereafter. The falling or declining wedge pattern indicates a market uptrend reversal. The convergence sends traders a signal of a market reversal during an uptrend, and the prices start to decrease as moreĪnd more traders start shorting their trades and exit the market. The prices also start to increase as more and more traders enter the market.Ī Rising Wedge Pattern is formed when two trendlines meet due to the continuously rising prices of two currency pairs. The convergence between these two lines sends traders a signal of a market reversal during a downtrend. (A trendline is formed by connecting either two or more highs or two or more lows in a currency pair’s price charts.) Let us understand all about falling and rising wedges in depth.Ī Falling Wedge Pattern is formed when two trendlines meet due to the continuously falling prices of two currency pairs.

The wedges alert you against any significant market highs and lows, enabling you to mitigate risks and maximise profits. The Falling and Rising Wedges pattern help identify market reversal signals and accurate market entry and exit points. The move was so strong that the bulls never let the correction take on the shape of a normal consolidation pattern that forms pointing down in to the uptrend or a sideways type pattern such as a triangle or rectangle.When you are trading currency pairs in the forex market, it is essential to know when the market can possibly reverse. Note the three red bullish rising patterns that made up that impulse leg to the double top at 775 area. Note the inverse H&S bottom that formed at the end of 2011 at roughly 450 or so. PCLN is a perfect example of what I've described above. Let’s look at a few charts that shows a very bullish move up that is made of several bullish rising wedges or flags. They are also like any other consolidation pattern that generally shows up as a halfway pattern.

Rising wedge pattern bull market series#

The opposite is true in a downtrend where you can have a series of bearish falling wedges or flags form. When a stock is in a strong move up you can see series of these patterns that from one after another until a top is reached. I have found out through many years of following these bullish or bearish wedges or flags that they tend to show up in fast moving markets. A typical consolidation pattern, like a bullish falling wedge or flag, points down in an uptrend which everybody sees and is accepted as the norm. Instead of pointing down into the uptrend these type of patterns point up into the uptrend. I've been following these two types of patterns for many years and find that are just as reliable as any another consolidation or reversal pattern.Ī bullish rising wedge or flag forms in an uptrend. That means anything is possible regardless of what is taught by the so called experts. Keeping an open mind in the stock markets is the first lesson to learn. These type patterns are missed by 95% of chartists because they supposedly don't exist and if they do exist they can't be trusted. I'm repeatedly told to go back to charting school to learn my lesson. I have gotten more negative e mails from folks that assure me there is no such thing as a bullish rising wedge or flag. In today's Chartology Report I would like to clear up a misconception about rising wedges and flags.