Here is how you can identify the rising wedge pattern in five easy steps – It occurs during rising markets and reverses into falling prices thereafter. The rising or expanding wedge chart pattern indicates a market downtrend reversal. Long the trade at this point to benefit from the rising markets. Identify the existing trend in the market to be a downtrend.Ĭonnect the lower low and lower high price points to get two downward sloping lines that converge during a downtrend.Ĭalculate the divergence between the current trading price of the currency pairs and the trendlines to see how much the market has deviated from the price highs and lows.Ĭonfirm the downtrend when the currency pair price moves below the support level and finally reveres and reverses into an uptrend. Here is how you can identify the falling wedge pattern in five easy steps – It occurs during falling markets and reverses into increasing prices thereafter. The falling or declining wedge pattern indicates a market uptrend reversal. The convergence sends traders a signal of a market reversal during an uptrend, and the prices start to decrease as moreĪnd more traders start shorting their trades and exit the market. The prices also start to increase as more and more traders enter the market.Ī Rising Wedge Pattern is formed when two trendlines meet due to the continuously rising prices of two currency pairs. The convergence between these two lines sends traders a signal of a market reversal during a downtrend. (A trendline is formed by connecting either two or more highs or two or more lows in a currency pair’s price charts.) Let us understand all about falling and rising wedges in depth.Ī Falling Wedge Pattern is formed when two trendlines meet due to the continuously falling prices of two currency pairs. The wedges alert you against any significant market highs and lows, enabling you to mitigate risks and maximise profits. The Falling and Rising Wedges pattern help identify market reversal signals and accurate market entry and exit points. When you are trading currency pairs in the forex market, it is essential to know when the market can possibly reverse.
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