The upper trendline pointing upwards, the lower trendline pointing downwards. The trendlines should point in opposite directions, the width between them broadening. We are looking for two touches to form both trendlines. The patterns are formed by drawing a trendline on either side of price peaks and troughs. The preceding price action determines the pattern title. Broadening Bottoms are formed after price falls. Broadening Tops are formed after price rises. Identifying Broadening Tops & Bottomsīroadening Tops and Broadening Bottoms look the same. They represent increasing volatility within a broadening range. Watch out for price reversing at the upper trendline on the fourth touch.īroadening Tops and Bottoms are wedges in price action that open outwards.
#Falling and rising wedge pattern full#
The target is the full height of the pattern, from the lowest low to the highest high forming the trendlines. Following the swing up from the lower to the upper trendline should price close above the third touch to the upper trendline then this provides a confirmation entry point. When price reaches the upper trendline again this completes the swing trade. Place a tight stop below the lower trend line. We can then trade price up to the upper trendline. Once we have established the two trendlines with the three price touches on either side we can trade within the patterns themselves, taking swing trades from top to bottom and bottom to top.įor example, price makes the third valley and touches the provisional trendline (made by the first two valleys), confirming the pattern.
There are a few ways to trade these patterns. Trading Ascending Broadening WedgesĪscending Broadening Wedges tend to breakout in the direction of the previous price trend and so act as continuations of this move. Tall and wide patterns work better than short and narrow patterns. The upper trendline should rise more steeply than the lower trendline thus forming the broadening wedge. Three touches to each trendline.īoth the upper and lower trendlines should rise. With the Ascending Broadening Wedge formation we are looking for three peaks and three valleys with tops and bottoms forming the trendlines. The higher lows make a lower rising trend line, this forms the lower boundary to our pattern. The higher highs make a rising trend line, this forms the upper boundary to our pattern. We are looking for higher highs and higher lows in a tight range. We then track price as it rises away from the low. The broadening aspect of them suggests increasing price volatility and increasing volume this spells out opportunity. The Ascending Broadening Wedge is one of six Broadening Wedge patterns to be found in price charts.īroadening Wedges are plentiful in price charts and can provide good risk and reward trades.
Descending Right-Angled Broadening Formations.Ascending Right-Angled Broadening Formations.There are 6 Broadening Wedge patterns that we can separately identify on our charts and each provide a good risk and reward potential trade setup when carefully selected and used alongside other components to a successful trading strategy.
#Falling and rising wedge pattern series#
Broadening Wedges are one of a series of Chart Patterns in Trading:
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