The_STA

Base or rising wedge - how can I tell?

Education
FX:EURUSD   Euro / U.S. Dollar
It appears to resemble a base, but it might also be interpreted as a rising wedge. One represents a potential reversal pattern, while the other suggests a continuation pattern. These interpretations can lead to conflicting perspectives. So, how do you make a decision?

I personally prefer to blend moving averages and the Directional Movement Index (DMI) to establish a directional bias. However, I also find it essential to determine the point at which my analysis might be invalidated. I maintain a specific viewpoint with an associated stop-loss level, ensuring I don't become overly attached to a single perspective.

Recognizing the moment when your analysis is proven incorrect and necessitates position adjustment is crucial.
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