![]() When this happens and the rising wedge is formed after an uptrend by two converging trend lines, you simply need to wait until the price reaches the bottom support trend line and make it a trade entry-level. In this case, the market is still in a bullish bias and the ascending pattern simply indicates corrections in the trend. In the chart below, you can see how the rising wedge pattern looks in a bullish long trend. However, in some cases, you’ll see that this pattern can also be used to identify a correction in a trend and thus, the continuation of the primary trend in the market. Generally, the rising wedge pattern always indicates a reversal in currency pair prices. Then, whenever you identify a rising wedge pattern near one of the Fibonacci levels, you can take it as a strong indication for reversal rather than correction. The best of all would be to draw Fibonacci support and resistance levels. To identify reversal, you will have to wait for at least one candlestick to be completed after the trend line breakout and confirm the trend reversal with other technical indicators.įor that matter, some of the most useful trend reversal indicators include the Relative Strength Index indicator, moving averages, and the MACD (Moving Average Convergence Divergence). In most cases, the rising wedge pattern occurs at the end of an uptrend and signals that the buying pressure is not likely to continue. ![]() With that in mind, let’s see how these different rising wedge formations look on trading charts. This makes rising wedges among the most reliable patterns in technical analysis but also among the most complicated trading strategies you can find in financial markets trading. However, the confusion with the rising wedge pattern is that it is difficult to accurately determine whether it is a continuation or trend reversal. This signals a slowing trend and a price trend reversal.
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