Let’s take a look at how to trade wedge chart patterns.
In a Wedge chart pattern, two trend lines converge.
It means that the magnitude of price movement within the Wedge pattern is decreasing.
Wedges signal a pause in the current trend.
When you encounter this formation, it signals that forex traders are still deciding where to take the pair next.
Types of Wedges
A Falling Wedge is a bullish chart pattern that takes place in an upward trend, and the lines slope down.
A Rising Wedge is a bearish chart pattern that’s found in a downward trend, and the lines slope up.
Wedges can serve as either continuation or reversal patterns.
In our next session, we’ll take a look at a falling wedge.
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