How to trade Forex with Rising Wedge and Falling Wedge
Rising wedge can function as a reversal or continuation signal for the movement of a currency pair’s price. If this rising wedge pattern is formed after a price movement tends to rise or an uptrend, it is likely to show a strong reversal signal.
By looking at the chart above, it can be seen that the wedge pattern is formed by starting the trend of an uptrend or an uptrend pattern from the price movement of a currency pair which then forms the highest price. Then when it touches the resistance level, a reversal occurs after a price consolidation in the range continues to rise and narrow as if forming a wedge as shown below.
And the following is an example of a wedge pattern that shows a strong continuous signal with the beginning of a downward price or downtrend.
After forming the lowest price, consolidation occurs and the price starts to move up and narrows in the price range and when it hits the range resistance there is a reversal to continue the downtrend pattern.
So it can be said that the formation of the rising wedge pattern is a delay in the fall of a price in the downtrend pattern that occurred.
And a conclusion can be drawn that this rising wedge pattern can indicate a reversal or sustained reversal of the price movements of the currency pair. If this rising wedge is formed after the formation of an upward trend in the movement pattern, it can be said that the rising wedge serves as a signal of a reversal but if it is preceded by a downtrend, the rising wedge functions as a continuation signal. This pattern can be included in the BEARISH CHART PATTERN group.
Like rising wedge falling wedge pattern can also be a reversal or continuation signal, but the function is reversed and grouped into BULLISH CHART PATTERN .
The following is an example of a falling wedge as a reversal signal with a characteristic starting with a downtrend.
Then followed by price consolidation in the range which decreased and narrowed in its range.When it gets down to the support level, the price gets ready for the upward climb up.
The take profit target can be measured from the height of the pattern and project it above the breakout point of the resistance line.
And the following is a falling wedge function as a continuous signal by forming price movements that tend to rise or uptrend.
After a price consolidation in the range that decreases and narrows in its range. When it gets down to the support level, the price of getting ready for a breakout climbs up, continuing the pattern of the previous movement, the uptrend.
And it can be said that the formation of the falling wedge pattern is the tendency of a delay in the pattern of movement that tends to rise or an uptrend that was previously formed.
Take profit targets can be obtained by measuring the pattern height and then projecting it to the breakout point until the resistance level.
Please keep in mind that when using technical analysis as a forex trading tool, we must always remember to apply risk management and are not too greedy in pursuing profits, especially when the forex trading platform is a feeling of not logic.