Rising Wedge And Falling Wedge – Studying patterns in forex traders is very important and needs to be done by traders. The patterns that exist in the forex is the basis that need to be understood by beginners who intend to jump and do forex trading. Without a good foundation, it will be very difficult once you get the benefits to be earned.
In this discussion we will explain to you all about rising wedge and falling wedge patterns.
What is that?
Here’s the full explanation for you.
Rising Wedge has a function as a reversal or reversal signal over the price movement of the currency pair. If the rising wedge pattern is formed after a price movement that tends to rise, then the possibility of a strong reversal signal.
Wedge pattern is formed beginning with trend pattern up from pair price movement of currency pair and then form the highest price. Furthermore, when it touches the resistance level there will be a reversal of direction after the price consolidation in the range that continues to rise and narrow as if forming wedge pattern.
With the above explanation, then we can conclude that the pattern of rising wedge will show a reversal of the movement of the price of the currency pair.
When rising wedge is formed after the formation of movement pattern that tends to rise, it can be said Rising Wedge has a function as a reversal signal direction. But, if preceded by a decreasing pattern of movement, then Rising Wedge has a function as an ongoing signal.
Just like the rising wedge pattern, falling wedge pattern can also be used as a reversal or sustained signal. It’s just that the difference is the function of the opposite and grouped into the Bullish Chart Pattern.
The falling wedge pattern as a reversal signal always begins with price movement that tends to decrease. Next will be followed by price consolidation in the range that decreases and narrows within range. As it progresses down to the support level, the price prepares for a breakout and increases.
Furthermore there is also a falling wedge pattern that is used as a sustainable signal by first forming a price movement that tends to rise or uptrend.
When there is price consolidation in the range that decreases and narrows in range. When it is getting down to the support level, the price of getting ready for the breakout increases and continue the previous movement pattern.
Thus it can be said that the formation of falling wedge pattern is a tendency to delay the movement pattern that tends to rise previously formed.
Take profit target can be obtained by measuring the height of the pattern and then project it to the breakout point until the resistance level.
The thing to keep in mind is that when you use analytical techniques as a forex trading tool, then you should always remember to apply risk management and not be too greedy when pursuing profits.
A simple rising wedge pattern can be interpreted as a pattern that describes the price moving in a narrow range and limited by the support and resistance lines.When connected between the highest and lowest points will form a triangle with an upward direction and is positive.
The narrower the range that occurs or the more tapered the angle is formed, then this will indicate the price will soon break out the reversal nature.
With the above understanding, it can be concluded that there will be a breakout support so that the price will move down. It can be concluded that the falling wedge pattern will be valid when the price successfully breakout resistance and the rising wedge pattern will be valid when the price successfully breakout support.
In the rising wedge pattern, the way to execute is by placing the pending order below the support line by placing the stop loss at the end of the resistance with the profit target on the previous support. Or you can also use other tools such as Fibonacci.
Aggressive traders will usually use the rising wedge pattern to scalping where they will take a small profit and short duration as long as the price is within the triangle range.
Such is the complete explanation we can convey about the pattern of rising wedge and falling wedge. Hopefully the explanation we have given above can give a lot of inspiration to you all who have read it.
Through the explanation above, I hope the information we have submitted you can apply to the forex trading is done. The ultimate goal is that you can make decisions related to forex better than ever before. Furthermore you can get a better profit and consistent in the trading done.
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