Hey, we are going to talk about a pattern today, called falling wedge, as it happened few days ago in
SANDUSDT
I'm just gonna talk about it as a good example.
Basically a wedge is a shape looking like triangle, it causes to make lower highs and higher lows which are closer to each other as we go along. we have 4 types of wedges listed below :
what I'd suggest is to treat all these shapes as kind of channels, You can buy low sell high and when the break happens get in and ride with it ( DO NOT FOMO ).
But lets talk what is actually happening behind these formations, lets talk price action a bit; a wedge usually happens after a trend, we usually find it after a leg up or leg down, and basically that means market is probably going to play around the highs or lows it made for a while before making a second large move ( Correctional or not ), so it will start forming these shapes.
normally when we see the price making lower highs in an uptrend ( or higher highs in a down trend ) we'd suspect a trend reversal, but in this case , the highs are really close and we are also making higher lows, this tells us, market is not going anywhere yet, because there is a fight going on between bulls and bears. eventually one of these sides will give up, and the support or resistance will break, That's the moment for us to get in and ride along the market.
This is basically all you need to know about wedges. pretty simple but useful. check the price action on Sand as an example and let me know if there are any questions.
SANDUSDT
I'm just gonna talk about it as a good example. Basically a wedge is a shape looking like triangle, it causes to make lower highs and higher lows which are closer to each other as we go along. we have 4 types of wedges listed below :
- 1. Falling wedge ( in uptrend or downtrend )
2. Rising wedge ( in uptrend or downtrend )
what I'd suggest is to treat all these shapes as kind of channels, You can buy low sell high and when the break happens get in and ride with it ( DO NOT FOMO ).
But lets talk what is actually happening behind these formations, lets talk price action a bit; a wedge usually happens after a trend, we usually find it after a leg up or leg down, and basically that means market is probably going to play around the highs or lows it made for a while before making a second large move ( Correctional or not ), so it will start forming these shapes.
normally when we see the price making lower highs in an uptrend ( or higher highs in a down trend ) we'd suspect a trend reversal, but in this case , the highs are really close and we are also making higher lows, this tells us, market is not going anywhere yet, because there is a fight going on between bulls and bears. eventually one of these sides will give up, and the support or resistance will break, That's the moment for us to get in and ride along the market.
This is basically all you need to know about wedges. pretty simple but useful. check the price action on Sand as an example and let me know if there are any questions.
Trade closed: target reached:
We reached ath, I believe we should save some profit here, I Don't recommend holding it