Tuesday, October 21, 2014

Forex Candlestick Pattern Tutorial – Wedges

September 1, 2010 by  
Filed under Forex Candlestick


In today forex candlestick tutorial, I will be sharing with you something known as wedges. Basically the wedges can be considered as a continuation or reversal patterns depending on the way it is slanted to.

Reversal Candlestick Pattern

When you are in a downtrend and you see the formation of a wedge that is slanted downward, you are actually seeing the formation of a falling wedge. The falling wedge is a reversal candlestick pattern and you should be waiting for a breakout on the upside before you enter a LONG trade.

Falling Wedges

Similarly, when you are in an uptrend, you should be looking out for the formation of a wedge that is slanted upward and this is known as a rising wedge. For this formation, you should wait for the price to break downward before you enter a SHORT trade.

Continuation Candlestick Pattern

When you are in an uptrend and you see the formation of a wedge that is pointing down, the market is forming a continuation wedge. For this formation, you should wait for the price to break up before you enter a LONG trade.

If you are in a downtrend and you see the formation of a up pointing wedge, you should wait for the market to break downward before you enter a SHORT trade.

Rising Wedges

You can try to keep a lookout for these formations as it can be very easy to trade. However you need to practice them frequently on your demo account until you are able to trade profitably with it before trading live with it.

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Comments

2 Responses to “Forex Candlestick Pattern Tutorial – Wedges”
  1. Newbie says:

    so where should we place our SL? And what’s our ideal TP?

    • Kelvin says:

      Hi Newbie

      For the stop loss, I will place it 20 pips above/below the trend line. For those high volatility pairs like the GBPJPY, I will place the stop loss 30 pips above/below the trend line.

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