You can also split it into two take profit levels. Take profit level is mirrored by measuring the height of the first swing wave in a rising or falling wedge pattern. Keep in mind, breakout candlestick must have at least 70% body (means small wick and big body). And then you will decide yourself which one option will be good. Here you will use your common sense and calculate risk reward ratio for each case. There are two options here, either to trigger a trade just after breakout of the trend line or to wait for retracement to the Fibonacci 50 level. A rising wedge can be both a continuation and reversal pattern, although the former is more common and more efficient as it follows the. Wedges can either form in the rising or falling. To form a rising wedge, the support and resistance lines both have to point in an upwards direction and the support line has to be steeper than resistance. It is usually accompanied by decreasing trading volume. What is the rising wedge chart pattern The rising wedge chart pattern is a recognisable price move that’s formed when a market consolidates between two converging support and resistance lines. The pattern appears as an upward-sloping price chart featuring two converging trendlines. It’s the opposite of the falling (descending) wedge pattern (bullish). Key Takeaways The rising wedge is a technical chart pattern used to identify possible trend reversals. Stop loss can also be placed above the key level which will be a more safe option but as we also have to look for a good risk reward that’s why first one is good. The rising (ascending) wedge pattern is a bearish chart pattern that signals a highly probable breakout to the downside.
Make sure to add spread while adjusting the stop loss level. Stop loss will be above the last high made by the price before breakout of trend line in case of rising wedge chart pattern. Now let’s talk about the stop loss, take profit and entry of trade setup. If Price break the trend line without touching resistance or supply level, then it can be a false breakout to trap retail traders. Like if there is forming a rising wedge pattern and there is also a strong resistance or supply level above then if Price break trend line after touching the resistance and supply level then it is a good pattern.
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