Hunt for an answer & explore

Right Angled Ascending Broadening Wedge Pattern

Right-Angled Broadening Wedges pattern come in two categories, ascending and descending. They comprise of a horizontal trend line and a sloping trend line. Prices should hit both trend lines twice. Two hits to form the horizontal trend line and two hits to form the sloping trend line. A partial rise or a partial decline is formed on a breakout from these two patterns

Strategy 1:

Right angled ascending Broadening wedge pattern:

We need to enter once the support level has been broken and the price starts to move towards downside target. In the below illustration of The Natural Gas Daily chart , wait for a candle to close below the horizontal support level before looking to go fresh short entry.

Technical Chart:


RightBroadening

The “stop loss” is placed above the sloping Resistance trend line of the Right angled ascending broadening wedge pattern. The “profit target” can be analyzed by calculating the height of the back of the Right angle Ascending broadening wedge and extending that distance down from the breakout.

The chart shows the following:

No:1 Area where price has broken the lower horizontal support trend line

1- Sell order (short entry)

2- Stop loss

Where the stop loss should be placed?

The stop loss should be placed above the top side of the Right angled Ascending broadening wedge.

No:3 Back of the wedge (Target aimed)

No:4 (this is the same height as the back of the wedge number-3)

The Profit target

The profit target is calculated by measuring the height of the back of the wedge and by expanding that distance down from the trend line breakout.

Trading the Right angled ascending broadening wedge:

Strategy 2:

In the natural gas Daily chart, wait for the price to trade below the trend line (broken support), as in the first illustration.

Place a sell order on the retest of the trend line (broken support now becomes resistance).

Technical Chart :


RightBroadening

No: 1 Point at which the price finds resistance at the lower part of the wedge.

1- Short entry

The chart above illustrates that the stop loss would go above the new resistance area.

No: 2 Back of the wedge

No: 3 The distance between entry (sell order) es1 and take profit tp3, same height as back of wedge no 2.

1- Sell order (short entry)

2- Stop loss

3- Take profit

Profit Target

Alike strategy 1, the profit target is calculated by taking the height of the back of the wedge and by expanding that distance down from the entry.

Conclusion:

A summary of the discussion so far “Right angled ascending broadening wedge pattern” indicates a likely selling opportunity either after an uptrend or during an existing downtrend.

The entry (sell order) is positioned when the price breaks below the bottom of horizontal support line of the wedge or when the price finds resistance at the lower trend line.

The stop loss is positioned above the back of the wedge.

The take profit target is calculated by taking the height of the back of the wedge and by expanding that distance down from the entry.

What is a Partial rise?

It can be termed as partial rise after the two trend lines have been formed the pattern can be identified. When price rises off the lower trend line, and doesn’t reach the upper trend line before falling back to the lower trend line.

What is a Partial decline?

It can be termed as partial decline when price falls off the upper trend line, and doesn’t reach the lower trend line before rising back to the upper trend line.

Your Comment here
Email Postby Comments