The whole truth about the rising wedge pattern and technical a

The whole truth about the rising wedge pattern and TA

Studying TA, psychology and many other concepts in trading I would like to make an intermediate conclusion.

TA (levels, patterns, etc.) are a tool to explain to most market participants on a basic level how the market works from a trader's point of view and explain the rules.

Let's say there is a level of support here we place a limit order and under it a stop (in these books it is called the work from the level).
But by coincidence very often happens that this stop loss is executed, the liquidity gathers and everything goes in the direction that you have assumed. This is what the ICT concept says about.

The same situation is in TA patterns, at the example I want to show one of such a Rising wedge or falling wedge and show the working out of these patterns, because it is very important for your further experience:

Examples:
- 1 example
on this chart we can see the ascending movement of the cuddles near the resistance line of this wedge, then a very slight encouraging correction and after a liquidity collection at the top, a fake test of this support line and a fall - so this pattern simply broke and didn't work out
(I want to note that this happened after binance futures went live and they liquidated $5b of traders in few days and a few months later binance bought coinmarketcap)

-2 example

Here we have a similar situation, we really bounced from the resistance line, broke through the support line and gathered shorts who were counting on (book scenario) breakthrough retest and continue the movement, as a result on stop losses, liquidation of short positions we went from 9k to 40k

- 3 example it takes place on smaller timeframes, it is similar to the 1 example, but after the break up the test support line and the continuation of the movement up

- 4 example
It is the working out of this pattern with a not perfect resistance line touching it 3 times and then falling

Conclusion: wedge is a pattern that market participants know, which works out at 50%. because other market participants understand where the liquidity is concentrated (stops and liquidations) and take advantage of it.



The current situation:
On the weekly chart it looks very strong, you can see the volumes below.

I want to caution before ETF approval, we saw the same euphoria before 20k as it was in late 2017 on the news about CME, and after the market was successfully shorted, now the biggest funds of the world want to enter the game, which already owns a lot of ETFs, but to perform manipulation and cascade liquidations they can make this dump, I am not 100% sure it will happen, but as the greats said: "buy on rumor sell on fact" in our case the fact is the ETF approval and after that there is a great market entry and we have time to go up until September 2025. Since the bull cycle started in November 2022 and will last 151 weeks.


Best regards EXCAVO