![]() To manage risk, place a stop-loss order above the upper trendline of the rising wedge. The target for your trade could be the height of the wedge projected downward from the breakout point. For a rising wedge, you may consider entering a short (sell) position when the price breaks below the lower trendline, which signals a potential trend reversal. ![]() It is very important to determine your entry and exit points before entering the trade. False signals can occur, so look for clear and distinct trend lines with multiple touchpoints. You should always double-check your analysis to ensure the rising wedge pattern is valid. Draw these trendlines on the chart to visualise the pattern better. Look for at least two higher highs and two higher lows that form the trendlines of the wedge. Traders should use technical analysis to identify the rising wedge pattern on the price chart. What to consider when trading the rising wedge? Relative strength index (RSI): The RSI crossing above or below 70 or 30 can also be a sign that the breakout is real. ![]()
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