Rising Wedge A Rising Wedge is a chart pattern within the context of an uptrend composed of two upward sloping and converging trendlines connecting a series of higher swing/pivot highs and higher swing/pivot lows. Rising wedge (also known as the ascending wedge) pattern is a powerful consolidation price pattern formed when price is bound between two rising trend lines. It is considered a bearish chart formation which can indicate both reversal and continuation patterns – depending on location and trend bias. Regardless of where the rising wedge appears, traders should always maintain the guideline that this pattern is inherently bearish in nature. HOW TO IDENTIFY A RISING WEDGE PATTERN: ~Establishing Downtrend. ~Rising wedge consolidation formation ~Linking higher highs and lower lows using a trend line assembling towards a narrowing point. ~Confirm divergence between price and volume may also be used. ~Look for break below support for short entry. HOW TO TRADE THE RISING WEDGE PATTERN: All Details are labelled in the Chart..
hi, why did you combine the rising wedge with ending diagonal? rising wedge is a continuation pattern in wave 4 that will break into downside after a downward move wave3 and its breakout wave5 will be in direction of wave3....
but ending diagonal is in wave 5 which consists of 3-3-3-3-3 subwave pattern and is a reversal pattern not a continuation pattern. please explain thanks.
Farzin
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@Farzin, I read more and found my answer. A rising wedge is a reversal pattern in an uptrend and a continuation pattern in a downtrend.
so if the trend before the wedge being downtrend, after the wedge breakout will be from the downside (continuation) if the trend before the wedge being uptrend, after the wedge breakout again will be from the downside (reversal)
also if rising wedge appears in wave1 it will have 5-3-5-3-5 subwaves. ( leading diagonal ) if rising wedge appears in wave5 it will have 3-3-3-3-3 subwaves ( exhaustion of trend ) ( ending diagonal )
rising wedge is a continuation pattern in wave 4 that will break into downside after a downward move wave3 and its breakout wave5 will be in direction of wave3....
but ending diagonal is in wave 5 which consists of 3-3-3-3-3 subwave pattern and is a reversal pattern not a continuation pattern.
please explain thanks.