Unlocking the Secrets of the Rising Wedge Pattern 📈🔍
Unlocking the Secrets of the Rising Wedge Pattern 📈🔍
✅The rising wedge pattern is a powerful technical analysis tool that can offer valuable insights into potential future price movements in the financial markets. This pattern is characterized by converging trend lines, with the upper trend line sloping upwards and the lower trend line sloping downwards. Traders and investors often use the rising wedge pattern to anticipate potential reversals or breakouts in the market.
Here we can see a rising wedge before the breakout
✅Understanding the Rising Wedge Pattern:
The rising wedge pattern typically forms during an uptrend and is considered a bearish reversal pattern. This pattern suggests that the upward momentum is weakening, and a potential trend reversal may be on the horizon. As price continues to oscillate between the converging trend lines, it creates a narrowing price range, indicating increasing indecision and potential impending volatility.
✅Key Characteristics:
- Converging trend lines
- Upward sloping upper trend line
- Downward sloping lower trend line
- Decreasing trading range
- Bearish reversal potential
Here we can see a rising wedge pattern after the breakout. The pattern evidently played out well.
✅Examples:
1. Stock Market Example:
In the stock market, a rising wedge pattern may develop on the price chart of a company's stock during a prolonged uptrend. As the pattern unfolds, traders and investors monitor the potential breakout or breakdown of the pattern to make informed trading decisions.
2. Forex Market Example:
In the forex market, the rising wedge pattern can be observed on the price chart of a currency pair. Traders analyze this pattern to anticipate potential trend reversals and plan their entry and exit points accordingly.
Here is one more rising wedge breakout example
✅Conclusion:
The rising wedge pattern is a valuable tool for technical analysts and traders seeking to gain an edge in the financial markets. By identifying and understanding the characteristics of this pattern, market participants can better anticipate potential trend reversals and capitalize on emerging opportunities.
By incorporating the rising wedge pattern into their analysis, traders can enhance their ability to make informed decisions and navigate the dynamic landscape of the financial markets. 📊💡
Chart patterns
How To Trade Like Banks Using Accumulation & Distribution: FOREXIn this video, I will be sharing How To Trade Like Banks Using Accumulation & Distribution and give my forex tutorial so you can watch it to possibly improve your forex trading skillset. The concept of accumulation & distribution in forex trading is very important to understand the cycles that the market goes through and not remain trapped in sideways moving markets with tons of manipulations.
General Pattern Failure Explained on BitcoinWhat is General Pattern Failure?
General Pattern Failure occurs when a chart pattern breaks out, fails to hit target, quickly reverses then rejects off that same breakout level back inside the pattern continuing in the opposite direction of the breakout.
Pictured above in the original chart is a normal breakout on a Inverse Head And Shoulders Pattern while the lower very right examples show General Pattern Failure on the same pattern. Note how the first example has a Bullish Retest (A) where price actually increases at the breakout while the second example is coming back inside that area and finding resistance back inside of the pattern, (Bearish Retest, (B) this then leads to price falling back inside with strong volume/momentum.
General pattern failure can also be considered a Liquidity Grab or can be referred to as a “Fake Out”.
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Other Examples:
The below image shows General Pattern Failure occuring in the opposite direction on #Bitcoin at $11000 on a Head & Shoulders Pattern.
The below image shows General Pattern Failure occuring on BNB Binance Coin (Great Example, Click the image to see the trade play out)
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Final Thoughts:
So by using the above methodology we have a potential clue here for Bitcoins next movement, I am watching the 49-50k area to see if we continue to fall or see a short term push (if we get back above the Inverse Head & Shoulders Pattern, $53000 is the next area of interest).
Learning to trade patterns such as these can provide great opportunities if you understand price action and how to identify the key areas of the pattern that other traders and investors may be focusing on too, these areas become important psychological levels on the chart that allow us to map out potential trades.
Failed Double Bottom: Small vs Large Chart PatternsIn this example on the PRAX Daily Chart, you see a bullish double bottom fail to extend to new recent highs due to it being a part of a larger bearish pattern.
It demonstrates that the typical behavior of chart patterns can fail to produce their typical results if found within larger chart patterns.
price action patterns you need to know ( part 2 )hi my friends , i'll share with you some patterns which can help you in trading ( part 2 )
1 - symmetrical triangle appears in both an uptrend and downtrend trend .
How we use it : You can enter after the break either down ( short ) or up ( long ) with good volume candle .
1- head and shoulders happens in an uptrend and is a reversal pattern , you can set your order after the breakout of the neckline with a good volume candle
finally the inverse head and shoulders appear in downtrend ( bullish pattern )
and you can set your order after the breakout of the neckline with a good volume candle .
please support me with like and follow me for more ideas and tell me what do you think about that .
TOP REVERSAL PATTERNSTOP REVERSAL PATTERNS
At the end of a trend, there is a typically a reversal pattern indicating to us that the trend is about to reverse. There are 3 main patterns that you NEED to know.
1. Double Top / Double Bottom
A double top /bottom pattern is a chart pattern that consists of 2 consecutive peaks of similar height indicating that there is not enough buying/selling pressure to surpass the extremes of the price. This leads to a reversal in trend.
Double top is a bullish to bearish trend reversal.
Double bottom is a bearish to bullish trend reversal.
For a safe entry, entry would be after the break of the neck line (the last swing point) which is a confirmation that the it is a valid double top /bottom pattern.
2. Rising Wedge / Falling Wedge
A rising/ falling wedge is a chart pattern that occurs when price is making higher highs and higher lows (in an uptrend – rising wedge ) and lower lows and lower highs (in a downtrend – falling wedge ). As the pattern progresses in the wedge , the range of the price contracts and is confined between 2 lines which get closer. Price eventually breaks out of the wedge and creates a reversal.
Rising wedge is a bullish to bearish trend reversal.
Falling wedge is a bearish to bullish trend reversal.
For a safe entry, wait for a breakout of the wedge to confirm the validity of the wedge pattern.
Rising Wedge
3. Head & Shoulders / Inverse Head & Shoulders
A head and shoulders pattern is a chart pattern that appears as a baseline with three peaks. The outside two peaks (shoulders) are close in height and the middle is highest.
A normal head and shoulders is a bullish to bearish trend reversal.
An INVERSE head and shoulders is a bearish to bullish trend reversal.
For a safe entry, it is often advised to enter on the break of the neckline as that would be confirmation of the head and shoulder pattern.
Inverse Head & Shoulders:
Do your best to find them in your analysis!
Create Alerts And Wait PatientlyCreate Alerts And Wait Patiently
There are two key steps to creating alerts:
1. Find Important Price Levels
Do your research. Find a price level that looks important and wait. Patience is everything. You have all of the tools available to you to research and follow markets. Whether it's a simple trend line , moving average or a custom Pine Script, use the tools to make better decisions.
2. Create The Alert
Once you've found a level that interests you, create an alert and walk away. Right-click on that exact price level and then select "Create Alert" from the menu. You can also use the keyboard shortcut Alt + A or on a Mac option + A. Lastly, at the top of every chart is an alarm clock icon ⏰. Click that to open your alert menu and get started.
The chart in this example shows a level we're watching. It also shows the alert we created. We have our eyes on a possible Double Bottom and we made an alert to watch that level. We'll get notifications on our TradingView mobile app, through email, and on our desktop. We won't miss it. 😁
Alerts can help you plan ahead and wait. We all know patience is important. So use alerts to express that patience.
Thanks for reading and we look forward to hearing your feedback in the comments below!
Creating A Trading Plan and Executing A TradeCreating A Trading Plan and Executing A Trade
As with all great trades, we require a trading plan. This is a perfect example of how to analyse, execute and manage your trade. See linked chart for the initial trade idea.
See below for a step by step guide on how we entered this trade and what we looked for.
Goodluck and trade safe!
Mar 26
Comment: First step: Identification. You have to identify when a trade set up is coming. For this pair, we were waiting for the ascending wedge to break down. From this you can see that we had an impulsve break of the ascending wedge indicating that the trend is about to reverse.
We also marked out an area of interest where price may come back to retest.
Second step: Preparation. We now wait for price to retrace back to the area of interest. We should also attempt to draw a trendline on the smaller timeframe to allow us to monitor the correction and get ready for the next step, execution.
We now wait for the correction to break. Entry is on the break of the correction with stoploss just above the correction. We use the start of the correction as the first TP or a level to put our trade in breakeven. For this set up, the stoploss was only 30pips and first target was 106pips (Risk reward 3:5)
Most Powerful Formation in Technical Analysis Sideways Channel!Hey traders so in the last lesson we spoke about how the Head & Shoulders pattern is great for spotting tops and bottoms in the market. Today I want to introduce you to the most powerful formation in all of technical analysis called The Narrow Sideways Channel. This is every traders dream to learn how to catch the big moves and profits that make history in the markets. They don't happen very often but when they do the market can explode and we can catch the big move before it happens. If you ever see one of these on your charts get ready to strap in your seatbelt because it will be a wild ride!
Enjoy!
Trade Well,
Clifford
Key Patterns Of Price ActionKey Patterns Of Price Action
Key patterns of price action.
Below I will describe several key patterns, but on the diagrams you can see the analysis from a technical point of view.
And also please pay attention to the rules, which I do not advise to ignore.
The Cup with a handle pattern is formed according to the following logic:
- On an upward movement, the bulls cannot push through the next resistance level , a correction begins. It is undesirable that there were impulses during a rollback, a moderate downward movement should be observed;
-By basic rules, the bottom of the cup should be formed in the area of correction levels. A deeper rollback is allowed in modified models. In case of a deep correction after entering the market, the position is transferred to breakeven as soon as possible, the probability of the trend continuation is lower, it is better to insure;
Double bottom
It all starts with the formation of a new low on a downtrend, after which a rollback against the trend occurs.
Then, the price goes down again and rests against the previous low. And finally, after pushing off from this level, an upward movement begins, which breaks through the level of the previous local maximum. It is after the breakout of this level (confirmation line) that the final formation of the 'Double Bottom' occurs and you can start buying.
The same is with a reversal in an upward market. After the first high, the price should fall by at least 10%. Otherwise, it will mean that the bears are not strong enough.
Saucer
Let's start with the shape of the figure. Contrary to its name, the correct shape of the 'Saucer' figure rather resembles a bowl.
As you can see, the figure is formed by a smooth price movement along a parabolic trajectory. The first half of the figure (the left side of the saucer) is a smooth descent from the edge of the saucer to its bottom. The second half of the figure (the right side of the saucer) is the same smooth rise from the bottom to the edge. Ideally, the second half should be a mirror image of the first. And the bottom should in no case be sharp .
The classic 'Saucer' is formed, as a rule, on large timeframes from D1. But you can also find him on H1.
Flat base
In trading, the term flat means an area on the chart, without a clearly defined direction of price movement, that is, a trend. In other words, flat is the opposite of a trend.
Misc Rules
-all BP = 10 pips
-ideal prior uptrend >30%
-for wks abv avg vol: #up>#down
-up 20% for new base
- undercut base resets base count
- 66% or 3rd stage base fails
- 80% of 4th stage base fails
- in base bottom look for
- shakeout
- tight closes
- volume dryout
- accumulation
great
thanks
Improve Forex TradingWhen I was learning how to trade and when I was watching and reading different trading educators, these words naturally pissed me off. What the hell are you talking about? What confirmation?
It was a full-blown mystery...🤯
Then, once I started to mature in trading and trade full-time, I became an author on TradingView.
Posting my forecasts and trading setups, I frequently mentioned the confirmation.
And now the newbies that are reading me and learning from me are pissed off...🤬
That is so funny I guess.
But the truth is that the confirmation must become a fundamental part of your trading strategy. It is your key to successful trading.
What exactly is the confirmation?
It depends on many many different things, in this article I will discuss with you the 4 main types of confirmation and give you detailed examples.
1️⃣ - PRICE ACTION CONFIRMATION
That is actually what I prefer.
Analyzing different markets and searching for decent trading opportunities often times we find some peculiar instruments to watch.
Identifying the market trend and key levels we find the potential spots to trade from.
But do we just open the trade once the "ZONE" is spotted?
I wish it could be that simple...
Trading just the zone, without additional clues brings very negative figures. We definitely need something else.
Price action & candlestick patterns can be those clues.
Accurate reflection of the current local market sentiment makes the patterns a very reliable confirmation.
Dodji's, pin bars, double tops/bottoms ...
Proven by history, the skill of identification & reading the patterns will pay off quickly.
Being in some sense the language of the market, the patterns are the fundamental part of my trading strategy.
2️⃣ - FIBONACCI LEVELS
Fibonacci levels are a very popular technical tool. Being applied properly it helps the trader to confirm or, alternatively, disqualify the identified "ZONE".
With multiple different methods like confluence trading, fibs are applied in hedge funds and various banking institutions.
The main problem with the fibs, however, is complexity and a high degree of subjectivity. Meeting different traders and watching different posts on TradingView I noticed that all traders tend to have their own vision. There is no universal system to apply here, a proper fib.confirmation technique can be built only with long-lasting backtesting and practicing.
3️⃣ - FUNDAMENTAL NEWS
The figures in the economic calendar, news, tweets. Actual fundamental news can become your best confirmation tool.
However, the main obstacle right here is the promptness, validity and reliability of the data that you get.
The information shouldn't be delayed and it must be objectively true.
The search for such a source is by itself is a very time-consuming and labor-intensive business not even mentioning its potential costs.
And that is not all. Knowing how to make sense of that data, its proper perception, and understanding requires a solid economical and financial background and experience.
At the end of the day, becoming an expert in fundamental analysis , the trader can easily sort the trading zones and trade only the ones that are confirmed by a decent fundamental trigger.
4️⃣ - TECHNICAL INDICATORS
I believe all the traders apply some indicators. From a simple moving average to some complex composite algorithms, indicators play a very important role in trading.
Being 100% objective and providing up-to-date real numbers and figures, they are our allies in a battle against subjectivity.
For many traders, the various signals from indicators are considered to be accurate and reliable confirmations.
Many algotrading solutions are operating simply relying on such signals and being able to bring consistent profits proves the power of technical indicators.
What confirmation type should you rely on?🧐
I guess the main rule right here is that the confirmation must MAKE SENSE to you. You should feel the logic behind that. It must make you confident in your action, even in case of the occasional losses, it must keep you calm and humble.
Let me know in a comment section what confirmation do you prefer!
The W pattern studyW pattern is directly opposite of the M pattern as you could probably assume
Using GNOUSD as an example we can see the W breaking out and completing its formation
In doing this it seemingly forms what I would call a 'Handle' for the pattern
Observing this allows the comparison between the two patterns (W and Cup and Handle)
Also the observation of a clear cut Top, similar to the cup and handle
Outlined on chart 1,2,3 are my key takeaway points that I have come to believe
The Art of Technical Analysis for Beginners part 1Hey Traders so today I wanted to make a brief tutorial on technical analysis for those who are new to trading. This will be a short series that gives you the tools to understand the charts without any indicators ever needed. This analysis can be applied to all markets Stocks, Forex, Commodities, Crypto etc...
Be on the lookout for future videos in the series and I hope it helps those who are new to trading!
Enjoy!
Trade Well,
Clifford
Copper with the Master Chef. All about the angles.If you are sitting in front of your computer screen, looking at charts, and asking yourself enough times... "how can I make money out of this?" ... this is what you're eventually going to be doing.
Make these drawings enough times and you should not only expect to make money, but you should be annoyed if you aren't. Don't let anybody else tell you what's right and what's wrong. Look at the charts, make your own decision, then let the markets tell you if you've cracked the code.
If I was like all the other bloodsuckers, I would charge you thousands for this diagram. I should sell this as an NFT for 15$ million. It's worth far more in the right hands. If I'm a parasite, I'm the most mutually beneficial parasite you've ever been lucky enough to stumble across. Asking nothing, giving everything. I guess that's it.
Working on Chapter 3. Trend Bottoming Signal.This will be lacking greatly compared to the book, but I have done my best to create a mirror image and explanation of one of the ideas. There are actually several important ideas that would help you generate what it is I have attempted to simplify here. I think if you try to draw value from this you might end up hurting yourself... But this is a place for me to put my personal things... so don't say I didn't warn you.
Where do you struggle?After my last couple of posts, I want to ask the question rather than just throwing ideas out there!
What aspect of trading do you fear? Why?
What do you think you could improve on?
Anything!!! Be interesting to see comments.
Personally, I can overanalyze and talk myself out of good setups. I've also been knowing to jump in trades too early.
This could be anything from risk management, psychology, wrong entries, taking profits too early, too many indicators, following the crowd?
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Pattern Cheatsheet: Identfying a Broadening Top PatternThe Broadening Top pattern appears when price makes a straight upwards run (similar to the "Flagpole" of a Bull Flag Pattern, then swings between two expanding broadening trendlines with at least 5 touches.
It is a neutral pattern which means it can break out in either direction, on the bottom right examples i have explained how the pattern is identified, measured and traded for both Bullish & Bearish breakouts.
The idea is to get a entry early by identifying the pattern, (point A) which allows for a better Risk:Reward ratio and closer stop loss. The second potential entry is at point B, which is considered a Bullish or Bearish retest ( Support/Resistance flip it is also known as), but this area is a bit risker and has less "room to move".
The pattern can give a a sign that the price may have a higher chance in heading in a certain direction, and we can measure the height of the straight run upwards, aswell as the height of the two LARGEST SWINGS within the pattern to get two possible price targets ; one conservative and one less so.
The Broadening Top appears frequently on Bitcoin & Ethereum and has one of the better success rates out of all the different Broadening Patterns and is one of the easiest to trade & identify because often it works similar to a Bull Flag pattern.
If you found this idea informative, Dont forget to show your support by liking & commenting thank you traders!
Learning to trade the Head And Shoulders Pattern with Bitcoin.The Head & Shoulders Pattern & Inverse Head & Shoulders Patterns are quite common on Bitcoin and have had great results on the higher timeframe charts.
Here are the main characteristics:
• VOLUME MIMICS PATTERN
• 3 PEAKS, LEFT & RIGHT SIMILAR HEIGHT
• TRIANGULAR IN APPEARANCE
• FOUND AFTER UPTREND
• HIGH SUCCESS RATE
• CAN BE SLANTED
Price forms 3 distinct peaks after a strong uptrend, the left and right peak should have a similar height (shoulders), the middle peak (head) has to be the highest or this can not be a HS pattern. They should seem triangular in appearance but as long as it fits the main characteristics can still be a valid pattern.
The right shoulder should form a lower high which is a early sign of trend change, this is entry A, with entry B being the bearish retest of of the “neckline” (marked on chart #2). The idea is to gain an early entry on the pattern at point A to maximise profits and reduce risk. Once price moves above the middle "peak" it is likely that the pattern is not valid anymore so this allows us to get a tight stop loss upon entry. We measure the height of the pattern and add it to the breakout level for a maximum possible price target.
Volume should also paint the same pattern with the 3 peaks, strong volume on breakout increases success rate.
In this example on Bitcoin earlier this year it played out perfectly, hitting target, when having another great short opportunity on the Bearish Retest. A bearish retest is just a Support & Resistance flip off the pattern breakout level.
After the pattern played out we also saw one more great opportunity with General Pattern failure.
What is General Pattern Failure?
General Pattern Failure occurs when a chart pattern breaks out, fails to hit target, quickly reverses then rejects off that same breakout level back inside the pattern continuing in the opposite direction of the breakout.
Pictured above in the original post is a normal breakout on a Head And Shoulders Pattern while the lower example shows General Pattern Failure on the same pattern. Note how the first example has a Bearish Retest (B) while the second example is coming back inside that area and finding support for a potential long setup.
(The below chart is the above example continued)
General pattern failure can also be considered a Liquidity Grab or can be referred to as a “Fake Out” also when it happens more rapidly after the original pattern breakout.
Learning to trade patterns such as these can provide great opportunities if you understand price action and how to identify the key areas of the pattern that other traders and investors may be focusing on too, these areas become important psychological levels on the chart.
<<Reversal Patterns of Technical Analysis>> Hello, my lovely and so clever friends! Today we are talking about <> 🧡
💥 Head & Shoulders Pattern 💥
After the pattern has become clearly visible, namely, the right shoulder is clearly visible, the trader needs to wait for the neckline breakout. Breakouts occur on strong impulses with a sharp increase in volume. Therefore, in order not to miss the entry and enter at the best price, it's better to use a sell stop order.
To calculate where the price will go after the breakout of the pattern, it is enough to measure the height of the pattern (vertical from the maximum of the head to the neckline) and postpone it to the breakout point.
💥Inverted Head & Shoulders Pattern 💥
An inverted head and shoulders pattern occurs in a downtrend and heralds an uptrend. The rules for working on a figure are similar to the previous ones.
It is worth noting that the head and shoulders pattern is rarely encountered in its pure form. Be careful!
💥 Double Bottom Pattern 💥
After you have identified the pattern on the price chart, you need to wait for the breakout of its resistance line. If the price has broken through the resistance, then the target will be the width of the pattern's range - the distance from the lowest point to the resistance.
💥 Double Top Pattern 💥
A double top is similar to a double bottom. The only difference is that this pattern is reversed and occurs on uptrends.
The number of extrema in a pattern can be not only double, but also triple, and even more. But the rules of work will be identical for everyone - enter on a breakout, postpone the target to the height of the figure and wait for its execution.
💥 Diamond 💥
We measure the height and wait for the breakdown of the diamond. If a breakout has occurred, then the price movement target will be the height of the pattern from the breakout point.
💥Cup & Handle💥
Trades are opened on the breakdown of the "handle" upwards. Target is the height of the figure.
Thanks for Your attention🙏🏻
Stay in touch🧡
Sincerely yours Rocket Bomb🚀💣
My previous work for You 💋
The Cup and Handle Chart PatternCup and Handle Chart Pattern
The cup and handle chart pattern is a bullish continuation pattern that marks a consolidation period followed by a breakout. It can help to predict future price movements.
A cup and handle chart pattern is comprised of three main components:
-A prior trend, as to qualify as a continuation pattern it has to have a prior trend
-The cup, "U" shaped resembling a bowl or rounding bottom with almost equal heights on the either side
-The handle, as the cup formation is completed, a trading range develops on the right-hand side forming the handle, usually 1/3rd of the size of the prior advance
In this chart pattern, there is a prior trend followed by a cup forming with almost of the equal heights on either side with a low in observed nearly in the middle. After the low, the rice consolidates to reach near the high of the start of the cup, followed by a pullback forming a handle, similar in shape to a flag or pennant. Once the handle reaches back to the same level of the cup highs, a breakout is expected, confirming with spikes in the volume observed.
Traders can use the cup and handle to buy when the breakout is observed i.e. at the candle when price breaks the highs formed by the cup. For confirmation, traders can use the sudden increase in volume as the cup and handle completes and the breakout is observed. Traders can put stop loss at the low of the handle in order to minimize the losses if the pattern fails,
There are few limitations as well to the Cup and Handle Pattern:
-Can be difficult to be observed for novice traders
-Often might require assistance from other technical indicators
-The cup and handle might take extensive periods to play out and complete the formation
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