The ascending broadening wedge is a chart pattern that can be traded in several ways; either as a bullish/bearish breakout or with a swing trading strategy.
A broadening wedge is a range where the price is holding between two trend lines that are moving apart. The pattern is also named a "megaphone" because of its shape.
Not all channels are easy to trade. In practice most aren’t. So an essential part of a price channel trading system is deciding which to trade and which to ignore.
A bullish engulfing candlestick can be a useful buy signal. But in order to trade them we have to be able to recognize reliable patterns from the false ones.
If you’d blindly traded the bearish engulfing candle over the past decade, you’d probably have done slightly worse than if you’d traded on a coin flip.
The first step in trend trading is spotting key support and resistances. This post looks at trend trading with support, resistance and confluence lines.
When a falling wedge pattern appears in a forex chart it hints at bullish sentiment. Like the rising wedge, this pattern is quite common at all time scales.