Forex Pattern Rising Wedge And Falling Wedge
Studying price patterns has become one of the most popular options for traders to get a direct trading signal from price movements on Chart. Examples of such price patterns include Rising Wedge pattern and Falling Wedge pattern. Both price patterns can be recognized easily and promise profitable trading opportunities.
What is Wedge Price Pattern?
Wedge price patterns are almost similar to Triangle and Pennant patterns. Basically, the patterns highlight the price movement of the cone. The indication is that the strength between seller and buyer is consolidating (as strong, but Volume is usually reduced), with a high potential to experience a Breakout in either direction.
Visually, Wedge’s price pattern is shaped like a slice of a circle. If the “wedge” is facing upwards, then the term is Rising Wedge. Whereas if “slices” duck down, the name is Falling Wedge.
Rising Wedge Patterns
The Rising Wedge pattern appears when the market consolidates with the slope of the Support line steeper than its Resistance line, so the low price is getting faster and faster than the high.
Although at a glance the price looks steadily higher, but the Rising Wedge price pattern indicates that the upward trend of the climb is weakening. That is, the volume is running low.
If this pattern is formed during Uptrend, then the price has the potential to turn the plunge. Meanwhile, if formed along the declining trend, the most likely is the price will resume the decline.
Falling Wedge Forex Patterns
Contrary to the Rising wedge, the Falling Wedge pattern appears when the market consolidates down with the Resistance line steeper than its Support line. Thus, the high value (High) is always faster than the low value (Low).
If this pattern is formed during the descending trend, then the price has the potential to rebound skyrocketing. When formed along the ascending trend, most likely the price will resume the increase.