Wedge

A Wedge is determined by Trend Lines meeting on a price chart. The highs and lows of a price series, from 10 to 50 periods, are connected by these Trend Lines.

The wedge appears as the lines approaching the convergence as these lines show either the rising or falling and differing rates. These are useful indicators of a possible price action reversal.

Interpreting a Wedge Pattern

* A sell signal is given if the pattern happens in a downtrend as the price falls below the support line;

* A buy signal if it happens during an uptrend as the price exceeds resistance line (a certain deviation is possible).

Price

After a Wedge forms, the price changes in the same direction in which it moved before the pattern. Calculate the target level through the following:

If a downtrend:

T = BP – (TS – PS)

For an uptrend:

T = BP + (PS – TS)

In the formula:

T is the target price;

BP – breakdown point;

TS is the starting point of the trend;

PS is the starting point of the template.

Risk disclaimer "Market Solutions Ltd – Suite 305 Griffith Corporate Centre P.O. Box 1510 Beachmont, Kingstown, St Vincent and the Grenadines is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0128 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of Market solutions Ltd and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from Umarkets.com or Market Solutions limited." Cookies notification: “We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Continue
×

Help with deposit?