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Rising Wedge

Real Success Rates of the "Rising Wedge" in TradingReal Success Rates of the Rising Wedge in Trading Introduction The rising wedge, also known as the "rising wedge" in English, is a chart pattern that has a remarkable success rate in trading. This analysis details its performance, reliability and complementary indicators to optimize its use. Success Rate and Performance -Key Statistics Overall success rate: 81% in bull markets Average potential profit: 38% in an existing uptrend -Breakout Direction Bearish: 60% of cases Bullish: 40% of cases Contextual Reliability Bull market: 81% success, average gain of 38% After a downtrend: 51% success, average decline of 9% Important Considerations The rising wedge is generally a bearish pattern, indicating a potential reversal. Reliability increases with the duration of the pattern formation. Confirmation of the breakout by other indicators, especially volume, is crucial. Complementary Indicators -Volume Gradual decrease during formation Significant increase during breakout -Oscillators RSI (Relative Strength Index): Identifies overbought/oversold conditions Stochastics: Detects price/indicator divergences -Moving Averages Crossovers: Signal trend changes -Dynamic Support/Resistance: Confirm the validity of the wedge -Momentum Indicators MACD: Identifies price/indicator divergences Momentum: Assesses the exhaustion of the trend -Other Elements Fibonacci Levels: Identify potential support/resistance Japanese Candlestick Analysis: Provides indications of reversals Conclusion The rising wedge is a powerful tool for traders, offering a high success rate and significant profit potential. The combined use of complementary indicators increases the reliability of the signal and improves the accuracy of trading decisions. It is essential to look for a convergence of signals from multiple sources to minimize false signals and optimize trading performance. _______________________________________________ Here are the best times to enter a trade after a rising wedge, in a professional manner: -The confirmed breakout Wait for the candle to close below the support line of the wedge. Look for a significant increase in volume during the breakout to confirm its validity. -The retest Look for a pullback on the broken support line, which has become resistance. Enter when the price rebounds downward on this new resistance, confirming the downtrend. -The post-breakout consolidation Identify the formation of a flag or pennant after the initial breakout. Enter when this mini-formation breaks in the direction of the main downtrend. -The confirmed divergences Spot bearish divergences on oscillators such as the RSI or the MACD. Enter when price confirms divergence by breaking a nearby support. -Timing with Japanese Candlesticks Identify bearish formations such as the Evening Star, Bearish Harami, or Dark Cloud. Enter as soon as the next candle confirms the bearish pattern. -Important Considerations Always place a stop-loss to manage risk effectively. Be patient and wait for the setup to be confirmed before entering the trade Check the trend on higher timeframes to ensure the consistency of the trade. Integrate the analysis of the rising wedge with other technical indicators to improve the quality of decisions. By following these recommendations, traders can optimize their entries on rising wedges while minimizing the risk of false signals.
BINANCE:BTCUSDEducation
by Le-Loup-de-Zurich
The Rising Wedge PatternA rising wedge is a bearish pattern when it appears at the top of a mature uptrend. It signifies that a potential top might be in the offing. The duration (short/medium/long term) of the top depends upon the timeframe on which it appears. Preconditions ------------------ > A strong mature (multi-day/week)trend in the background > Wave HH1 to be extremely smaller than H > HH2 should be smaller than HH1 > HH-HL structure results into a rising wedge or arrowhead > It should appear at the potential top of a rally > Wave LL has to be snappier/abrupt/faster than wave HL & L Volume characteristics ---------------------------- > The volume in HH1 is generally less than volume in wave H > Volume in HH2 is less than volume in HH1 > Volume in wave LL should be higher than volume in wave HL and L Confirmation ----------------- > Wave LL breaks the low of wave HL Psychology -------------- > Weak character of waves HH1 & HH2 with shortening of length and lesser volume means buyers are not interested at these levels > Breakout buyers trapped above H and HH1 > Sharp wave LL with increasing volume suggest that sellers are taking over and a potential medium to long term top may be in place Trading --------- > Book profits full/partial, in any long position, at the break of HL > Risk takers short at the break of HL but risk in may be large as stop loss (above HH2) could be wide > Other may wait for a pullback on the upside (after break of HL); price often reverts back to average prices where short position can be taken > Always try to minimize risk, either by reducing position size or otherwise Do not forget to like/comment/share for more updates in future. Thanks for reading
NSE:NIFTYEducation
by Bravetotrade
28
Spotting A Crash With RSI and MACD in five stepsFollowing are common things one can spot on weekly chart which happen before fall/crash of 2008 and 2020, similar thing can be found in other indices and on all time frames in chart 1. Price will continue to make higher high RSI or MACD indicators will show trend exhaustion with lower high not breaking previous high 2. Series of Negative divergence is seen on chart, look for 3 or more (RSI is leading indicator will produce more divergences compared to MACD) 3. Look for Head and Shoulders or Rising wedge or double top pattern on chart at top of trend 4. Finally Divergence line is broken out upside signaling final move started, that's exit signal 1. 5. Rsi will break line again downside and MACD crosses below signal line, that's exit signal 2. DISCLAIMER:There is no guarantee of profits nor exceptions from losses. Technical analysis provided on the chart is solely the personal views of my research. You are advised to rely on your own judgments while taking any investing/Trading decisions. Past performance is not an indicator of future returns. Investment/trading is subject to market risks. Seek help of your financial advisors before investing/trading. Not recommended to take FnO positions based on this analysis
NSE:CNX500Education
by Niftydirection
2
What are Falling and Rising Wedge Patterns?What Is the Wedge Pattern and Its Common Characteristics? 1. Wedge patterns have converging trend lines that come to an apex with a distinguishable upside or downside slant. a. Wedge with an upside slant is called a rising wedge b. Wedge with downside slant is called falling wedge 2. It has declining volumes as the pattern progresses 3. It breaks out from one of the trend lines Why We Should Pay Attention to Wedge Patterns? Some studies suggest that a wedge pattern will breakout towards a reversal rather than a continuation more often than two-thirds of the time. Therefore as the rule of thumb, people generally treat a falling wedge as a bullish pattern and a rising wedge as a bearish pattern , especially a falling wedge would be a more reliable reversal indicator than a rising wedge Since we know a wedge pattern has a higher probability to reverse and due to the fact that the price of wedge pattern converges to a smaller area, we can trade the reversal set up with a relatively close stop loss to its entry price, which provides us with a good trading opportunity with a decent Risk:Reward ratio. Examples of a Bullish Rising Wedge and Bearish Falling Wedge Sadly, there is nothing that works 100% in trading. Not every rising or falling wedge will reverse as one might expect. Every trader must properly manage their risk by setting stop losses and not just trading based on price patterns. Below are two examples. Bullish Rising Wedge ( ETHUSDT during 15/NOV/20 - 28/DEC/20) In the early stages of the epic 20-21 bull market, if traders blindly treat the rising wedge as a bearish signal and trade accordingly, they would pay a heavy price. Bearish Falling Wedge ( LTCUSD during 14/AUG/18 - 14/NOV/18) On the contrary, in the late stage of the 2018 bear market, any trader who blindly trades the falling wedge to bet on a reversal would also learn a hard lesson. Comment down your thoughts on Wedge Patterns in the comment section. Disclaimer: This is just an educational post. Never trade just any pattern. And please do your research before making any trades. Happy Trading!
Education
by Coinlog
4
Rising Wedge - "Learn More Earn More" with usWhat makes the chart interesting today is that: . BTCUSD challenging the Wedge's UpTrend. . A break bellow Wedge's UpTrend could push the pair to its $10,400 ~ $10,500 previous support areas. . A rejection at the Wedge's UpTrend, however, could lead to another retest of the Wedge's top. Will the BTC see an downside breakout against the USD? No one knows it! We have to wait and see! Learn More, Earn More, With ForecastCity!
BITSTAMP:BTCUSDEducation
by ForecastCity_ME
4
NIFTY INDEX TREND SETUP NIFTY INDEX TREND SETUP -NIFTY WITNESS ONE OF THE WILDEST SWING THIS WEEK -THE CRUCIAL PART THAT I AM EXPLAINING EVERONE IS THAT 9950 WAS NOT BREACH ON A WEEKLY CHART AS WELL ON DAILY -THE SHORT COVERING RALLY IN THE INDEX PROVED TO BE VERY VITAL -THIS INDICATES THE STRENGTH IN BUY ON DIPS MARKET -20 AND 50 EMA WERE TESTED GAPS WERE CLOSED AND THE PRICES MOVED ON -WHAT IT CONFIRMED ON A DAILY CHART IS A "FALSE BREAKOUT DOWN" -200-EMA IS FALLING -INDEX IS STALLING -NIFTY CAN KEEP CRAWLING TOWARDS 10440(61.8%) ZONE NIFTY TRADE SCENARIO -WHENEVER THERE IS A FALSE BREAKOUT WE EXPECT FIRST THE OPPOSITE BOUND TO BE TESTED (10330) -"BULLISH MARABUZO" CANDLESTICK PATTERN VISIBLE -NIFTY HOLDS ON TO ITS SUPPORT OF 9950 -I KNOW SGX IS INDICATINGA NEGATIVE START BUT STILL NOT BROKENDOWN I EXPECT MARKET TO RECOVER ON MONDAY -CRUCIAL TO REGAIN 10030 WHICH IS ALSO ONE OF MY CRUCIAL SUPPORT LEVEL AS WELL AS 100-EMA ZONE -NEXT LEVELS TO BE TESTED 10130 10165 10220 10275 10330 -ON THE DOWNSIDE 9880 9830 9750 -WILL ALL ACT AS SUPPORT FOR THE MARKET "WHAT IS CONFIRMED IS A VISIBLE RISING WEDGE PATTERN FOR NOW" "INITALLY I THOUGHT IT MIGHT BE A BULLISH CHANNEL" (CHECK PREVIOUS CHARTS) "BUY ON DIPS" RECOMMENDED "MY VIEW IS CLEAR WE CAN BREAK OR TEST 10330"
NSE:NIFTYEducation
by manavtechresearch
21
Nifty : Making Rising WedgeNifty is forming a rising wedge formation which is a sign of back to normal phase of markets, crackdown might be edging around the corner. if you have any queries regarding above idea or any other stock feel free to D'M Announcement : We launched TruStox Community, A community driven platform for Traders with almost all features that a trader needs. Here are some of them:- Trade assisting Tech. Regular Study Conferences. Collective Fundamental Research. Access to Tools from Trader's Toolkit. & many more. For More information visit @ trustox.wordpress.com/community/ Note : Trading in any financial market is very risky. We post ideas for educational purpose only. It is not financial advice. Do not hold us responsible for any potential loss you may incur. Please consult your financial adviser before trading.
NSE:NIFTYEducation
by TruStox
RISING WEDGE PATTERN ( REVERSAL OR CONTINUATION )Reversal or Continuation Pattern Rising Wedge Prices are moving upward, forming higher highs and higher lows, but the price is confined within two lines which get closer together to create a pattern. This indicates a slowing of momentum and it usually precedes a reversal to the downside. This means that you can look for potential selling opportunities. IDENTIFICATION GUIDELINES 1. The Shape of The Rising wedge – Two price trendlines both sloping upwards, the upper one following higher highs and the lower one following higher lows. Both trendlines must slope upwards and eventually intersect. 2. Formation of The Rising Wedge – Prices should rise to hit the upper trendline at least three highs(1-3-5), then fall away. Prices should fall to the lower trendline at least twice(2-4), then rise again before a final breakout. When you see less than 3 swing highs and 2 swing lows between the upsloping trendlines, be cautious about it. 3. Duration of The Rising wedge- The Rising Wedge has a minimum duration of 3 weeks and it rarely exceeds 3 or 4 months long. Anything less than 3 weeks of duration likely to be a pennant formation, not a rising wedge. 4. Volume inside The Rising Wedge – Volumes tends to be decreasing through the formation. 5. Pre-mature or False Breakout – Because volume is usually low in The Rising Wedge formation, it takes very little activity to bring about an erratic and false movement in price, talking the price outside of trendlines. 6. Breakout – Price closing below the lower rising trendline confirms the breakout. HOW TO TRADE A RISING WEDGE Trading Rules. 1. Entry – Sell short the stock day after Prices closing below the lower rising trendline. If you miss it, wait for the pullback then short when price resumes the breakout direction after the throwback completes. When you missed and, If you Don’t Get A pullback to the lower rising trendline then Don’t Chase The Stock Price for selling short. 2. Price Target – The technical target is the price which was a starting point of the lower rising trendline. 3. Taking Profit – For short-term traders, cover short when the price reaches near to the price which was a starting point for the lowe rising trendline. For intermediate and long-term traders, hold the stock as per your risk & capital management applied before entering into a trade. 4. Stoploss – usually, price closing above swing high or top is a stop-loss. But very often, The gap between swing high and breakout price is very high. So it won’t be suitable for a good risk-reward ratio. Without a Good Risk to Reward ratio in trading or investing can never create a wealth. Always Pay close attention to Risk-Reward Ratio. We must have RR above 1: 2.
NSE:NIFTYEducation
by Equity-Earningz