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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

Falling and rising wedge chart patterns: a trader's guide

Cyril Sarratt

Dec 02, 2021 15:04

Wedges can provide a vital early indication of a cost turnaround or continuation. Find out everything about the falling wedge pattern and rising wedge pattern here, consisting of how to identify them, how to trade them and more.

What is the rising wedge chart pattern?

The rising wedge chart pattern is a recognisable price move that's formed when a market consolidates in between 2 converging support and resistance lines. To form a rising wedge, the assistance and resistance lines both have to point in an upwards instructions and the assistance line needs to be steeper than resistance.


image.png

 

Like head and shoulders, triangles and flags, wedges often cause breakouts. When it comes to increasing wedges, this breakout is generally bearish.

 

Rising wedges can occur when a market is increasing or falling:

  • When a market remains in an uptrend, they're an indication that traders are reassessing the bull relocation

  • When a market is falling, they're a short-term time out before the bear market takes hold again

 

Initially look, a rising wedge appears like a bullish move. After all, each successive peak and trough is higher than the last. The key point to note is that the upward moves are getting shorter each time. This is the sign that bearish opinion is forming (or reforming, when it comes to an extension).

 

This unfavorable belief develops, so that when the marketplace moves beyond its rising assistance line, anybody with a long position might rush to close their trade and limit their losses. Those waiting to short the market, meanwhile, will jump in. This triggers a tide of selling that causes substantial down momentum.

 

Rising wedges can take place on any market that's popular with technical traders, including indices, forex and stocks.

 

Open an Top1 Markets account to start trading them now.

What is the falling wedge chart pattern?

The falling wedge chart pattern is a recognisable cost relocation that is formed when a market consolidates in between 2 converging support and resistance lines. To form a coming down wedge, the support and resistance lines have to both point in a downwards direction and the resistance line needs to be steeper than the line of assistance.


image.png

 

A falling wedge is basically the specific reverse of a rising wedge. So it also typically causes breakouts-- but while ascending wedges cause bearish relocations, downward ones lead to bullish moves.

 

  • When a market is on an uptrend, they represent a short-term time out prior to the long-term move takes hold once again 

  • When a market is falling, they're a sign that traders are reevaluating the bear move

 

Similar to their equivalent, the rising wedge, it may appear counterproductive to take a falling market as an indication of a coming bull relocation. In this case, it's crucial to note that the down moves are getting much shorter and much shorter. This is a sign that bullish viewpoint is either forming or reforming.

 

Studies have actually shown that falling wedges cause breakouts somewhat regularly than increasing ones. To identify them, however, you'll require a platform with powerful charting tools: such as the Top1 Markets trading platform or MetaTrader 4.

Strategies to trade wedge patterns

To design your wedge trading strategy, you'll require to decide when to open your position, when to take profit and when to cut your losses.

Opening your position

Not all wedges will end in a breakout-- so you'll wish to verify the move before opening your position.

 

One method to confirm the move is to wait for the breakout to begin. Basically, here you are hoping for a considerable move beyond the assistance trendline for a rising wedge, or resistance for a falling one.

 

For rising wedges, for instance, traders will frequently keep an eye out for a relocation beyond a previous assistance point. You can use the basic guideline that support turns into resistance in a breakout, suggesting the market might bounce off previous assistance levels on its method down. As a result, you can await a breakout to start, then wait on it to return and bounce off the previous assistance location in the ascending wedge. This will enable you to make sure that the move is verified before opening your position.

 

Another typical signal of a wedge that's close to breakout is falling volume as the marketplace consolidates. A spike in volume after it breaks out is a good sign that a larger move is on the cards.

Taking profit

Here, we can again rely on 2 basic guidelines about trading breakouts. The first is that previous assistance levels will end up being new levels of resistance, and vice versa.

 

Say ABC stock strikes $65, $55 and $45 as the peaks in its coming down wedge. These resistance points might end up being areas of assistance in its next move up.

 

The second is that the range of a previous channel can suggest the size of a subsequent move. In this case, it's frequently the space between the high and low of the wedge at its beginning. If a rising wedge starts with support and resistance 100 points apart, the market might then fall 100 points once the breakout is validated.

Cutting losses

One advantage of trading any breakout is that it ought to be clear when a prospective relocation has actually been invalidated-- and wedge trading is no different. Let's have a look at a rising wedge as an example.

 

Say EUR/USD breaks listed below the assistance line on its wedge, however then rallies and strikes a new greater high. Both lines have now been exceeded, meaning that the pattern has actually broken. So by putting a stop loss at the previous market high, you can close the trade prior to additional losses are incurred.

 

Additionally, you could put a stop loss a little above the previous level of assistance. Then, if the previous assistance fails to develop into a brand-new resistance level, you close your trade.

Rising wedge example: Russell 2000

image.png


In early 2018, the Russell 2000 index participated in a wedge that sped up completion of a long bull market. Trading combined in between two lines that edged ever closer to each other, but soon before the lines satisfied the index broke below support and started a bear run.

 

Keep in mind how the index discovered assistance at 1600 on its upward move, which became a location of resistance in its subsequent downward breakout-- and how the initial breakout approximately matches the series of the wedge.

How to begin trading wedges

  • Learn the principles of technical trading at Top1 Markets

  • Sign up for a live account to buy and sell countless indices, shares, currency sets, cryptos and more

  • Recognize wedges using our extensive charting tools

  • Open your position

 

Not quite all set to trade with genuine capital? Open an Top1 Markets demo to trial your wedge method with $10,000 in virtual funds.

Falling and rising wedge patterns summed up

  • Wedges are a technical pattern that traders utilize to recognize approaching bull and bear markets

  • Falling wedges typically result in bull markets, while rising wedges often lead to bearishness

  • To trade them you'll require to decide where to open your position, take profit and cut losses

  • You can discover more about wedges-- and other chart patterns-- at Top1 Markets