![]() Third, the formation can take a long time to develop, which can lead to frustration for traders who are trying to trade it. Second, it is difficult to spot on a chart. Trading Strategyīroadening wedges are difficult to trade for a number of reasons.įirst, the pattern is prone to false breakouts. The target for this trade could be the same as the height of the wedge.Ī long breakout candlestick shows that bearish sentiment was gaining momentum, and a strong downtrend was likely to follow.Įven if this is an ideal setup for a short position, don't forget to place a stop loss to limit your risk in case the market goes against you. We would enter the market when the broadening wedge breakout occurred. Now let's dive into some variations of the broadening wedges. This pattern can take a long time to form, so patience is your key to success. The break-out from the wedge formation is often accompanied by an increase in trading volume, which can confirm the strength of the move. This shift typically occurs after a period of consolidation or range-bound trading. The extending pattern is created when there is a shift in the balance of power from the bears to the bulls. The breakout phase: This is when the wedge breaks downward or upward. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |