#Falling broadening wedge how to#
#Falling broadening wedge update#

I’ve been improving my skills of applying Expanding Wedge for a long time, but it has never entered my head to combine it with other graphic patterns. Combination of Expanding Wedge and other patternsĮvery day is a lesson. In the following articles, we will discuss its formation on the basis of other graphic configurations. The Expanding Wedge pattern is universal for different markets, instruments, and timeframes. In my opinion, not only does it create additional entry points, but it also raises the effectiveness of the strategy. Sometimes a derived graphic configuration appears inside the Expanding Wedge pattern. It is usually located two levels above the entry point. However, much depends on the stop loss order. On the contrary, if the pair goes into consolidation, then the probability of loss-making trades increases. If the struggle between the lions ends quickly, then the coyote will soon be full. The main problem is connected with the strength of opponents. Simply put, if the quotes, after reaching 78.6% of the wave 4-5, returns to 61.8%, there is a signal for opening the short position.

Aggressive trading is based on selling at the return to the previous price level. The critical value is 78.6%.Ĭonservative strategy involves entering a short position at the repeated support test at point 5.

The pattern is a reversal pattern, but if the correction passes the level of 88.6%, then it should be considered a trend continuation pattern. Formation of the Expanding Wedge pattern is considered complete if after point 5 there is a rollback in the direction of 23.6%, 38.2%, etc. The depth of its location does not matter either.

#Falling broadening wedge update#

Ultimately, endurance is almost the most important quality that a trader must possess.Īs soon as the quotes of the analyzed pair update the low at point 3, point 5 appears. The struggle of the two lions reaches the boiling point, and the coyote continues to wait. As a result, we have an Expanding Wedge - a combination of two differently directed lines 1-3 and 2-4. The starting point is the correctional low (point 2 of 1-2-3 pattern). The quotes go into consolidation, and the trader redraws the points in the chart. Buyers launch the attack, they test the high at point 3, however, their hopes will not come true either. If it occurs in a bullish market, then the inability of the bears to reverse the trend through the breakout of point 2 is the first sign of the strength of their opponents. Identification of the model begins with the appearance in the chart of the 1-2-3 pattern. I have used the techniques for improving it and trading strategies from my personal practice. This graphical configuration was developed by Thomas Bulkowski and first mentioned in the book Encyclopedia of Chart Patterns.

#Falling broadening wedge how to#

The Expanding Wedge pattern on the basis of the 1-2-3 pattern will tell you how to do this. What you need to do is take the side of the winner. The emergence of several consecutive highs and lows simultaneously indicates an increase in volatility and blood fight for the initiative. If both opponents are strong, then, as a rule, this is expressed in the rewriting of extremums by the chart.

Combination of Expanding Wedge and other patternsĬoyote Tactics: the Expanding Wedge will show the way.

Coyote Tactics: the Expanding Wedge will show the way.

The article covers the following subjects: Stand on the sideline and wait until the battle of lions is over. In this scenario, the best thing a trader can do is apply the Coyote tactics. Large fishes fight for the initiative, banks and investment companies give different estimates of the current situation, and the plankton rushes from side to side. It's different when the market consolidates. The crowd is trying hard to jump into one of the cars of the train leaving in a certain direction, analysts write the same typical forecasts, and any proposal to cross the road is perceived by the majority as dissent. When a trend dominates the market, few doubt who controls the situation.