Tune in to our live webinars for live access to our DailyFX experts discussing trading strategies, tips, news and forecasts on many different markets.At DailyFX we researched over 100,000 live IG Group accounts to find out the secrets of successful traders and published the findings in our Traits of Successful Traders guide.For more insight on trading the forex market, take a look at our top forex strategies to find the one that suits you. If you are just starting out on your trading journey it is essential to understand the basics of forex trading in our new to forex guide.Consider other chart patterns like the head and shoulders, double top and double bottom that can enhance your pattern recognition.Opportunity for favourable risk-reward ratiosĬan signify reversal or continuation patternsįurther Reading on Forex Trading Patterns Requires additional confirmation using other technical indicators and oscillators Occurs frequently within financial marketsĭefines clear stop, entry and limit levels Advantages and Limitations of the Rising Wedge AdvantagesĮasy to identify for more experienced traders The limit in this example was taken from the previous swing low giving this trade an extremely positive risk-reward ratio. This identification point makes it relatively simple to locate the stop level for novice traders. The stop level as highlighted on the chart is elected from the high point of the rising wedge located on the resistance trend line. Enter into the short position as soon as the price breaks the support line, regardless of the candle close.Wait for a candle close below the support trend line before entry.The entry point (labelled) occurs once the trend support line of the rising wedge has been breached. This is known as divergence, showing that the upward movement is coming to an end. Confirmation of the uptrend waning in strength can be seen using the volume tool on the chart which depicts fading volume in concurrence with the ascending price in the market. The rising wedge is outlined by the blue dashed lines showing diminishing bull strength in the uptrend. The chart above shows a rising wedge ‘continuation’ pattern after a determined downtrend. The example below shows the formation of a rising wedge on a forex pair depicting a continuation.ĮUR/USD rising wedge forex chart pattern: The rising wedge forex pattern is linked with both continuation and reversal patterns as mentioned above.
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