Wednesday, December 28, 2011

Broadening Formations

*Occurs during high volatility.
*A period of great movement but little direction.
*Identified by a series of higher pivot highs and lower pivot lows.
*Considered a rare formation.
*Can be a period of consolidation or reversal.
*Considered difficult to spot.
*False Break-Outs and confusing price action are often prevalent.
*Can be powerful continuation or reversal patterns.

Variations Right Angled, Descending Wedge(falling wedge), Ascending Wedge (rising wedge).

Rules (Falling Wedge):
1. Must be a prior downtrend to reverse.
2. There must be 2 reaction highs from the peak to form the resistance trendline.
3. Similarly there must be 2 reaction lows with the 2nd low lower than the 1st.
4. As the pattern matures the upper and lower trendlines should converge (ie come together). Ideally there will be a 3rd shallower low before breakout to the upside occurs.
5. There is a convincing breakout to the upside through resistance trendline.
6. Volume pickup also occurs at the breakout. Low volume moves are prone to a higher rate of failure.
alternatively watch for a breakout above a previous high.
Unlike symmetrical triangles falling wedges have a definite slope to the downside and a definite bias to the upside.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer


  1. GPS robot tripled the $100k deposit [live proof authenticated]

    I just finished a webinar with Mark and his partner, Antony, two days ago and it was AMAZING.

    During the webinar Mark and Antony shared their secrets to success and answered questions about their new version of the GPS Forex Robot that IS COMING OUT TODAY!

  2. Forex Trendy is an advanced software capable of determining the safest continuation chart patterns. It scans through all the charts, on all time frames and analyzes every possible breakout.

  3. Quantum Binary Signals

    Get professional trading signals delivered to your cell phone daily.

    Follow our signals today and gain up to 270% per day.

  4. Interesting points related to forex trading I got to learn here.Traders must explore such posts to learn about market and its terminologies.
    mcx tips

  5. The mt4-webtrader provides instant online access to the global financial markets, and allows you to trade from any computer, operating system or browser. No download is needed. Just sign into your account through the browser of your choice