Wedges

A wedge pattern can signal either a bullish or bearish reversal pattern.

They are commonly found on all time frames across the charts. However, if one doesn't know how to correctly identify a wedge pattern, they will start to see them everywhere.

Part of the process is using the trend lines drawing tool to highlight the wedge pattern.

You should never try to force the drawing of such patterns to fit your bias.  Instead, look for signs of confluence such as declining volume and smaller moves in price action as the pattern reaches its completion.

Furthermore, you will also need a price target for where you expect to take profit and thus we refer to Fibonacci levels.

Risk management is a given with any trade, be aware of liquidity grabs/stop hunts and fake-outs with such a pattern. Price may momentarily leave the pattern range to stop out those who entered prematurely, only then to re-enter the pattern with continuation.

Have your stop loss set accordingly.

As always, you never want to enter a trade based on this pattern alone. Always have confluence to reinforce your strategy.

NOTE: There are patterns similar to the wedge such as; pennants, and triangles, be sure not to get them confused.

Time Stamps

2:30 – XRP Previous COTW (DO NOT TRADE THIS)

13:30 – RISING WEDGES

• At least 5 touches – usually two on the bottom, three on the top
• Bull volume has to decline and impulses should get smaller and smaller
• Sometimes you do not get the exact touch of the trendline but it still counts
• Aggressive: short the third touch, SL above the trendline
• Conservative: short a breakdown
• More conservative: short a retest of a break (if it comes)
• TARGETS: pull the fibs from the start of the move to the end – TP1= .382, TP2= .618, TP3= start of the rising wedge

24:31 – FALLING WEDGE

• At least 5 touches – usually two on the top, three on the bottom
• Bear volume has to decline and impulses should get smaller and smaller
• Sometimes you do not get the exact touch of the trendline but it still counts
• Aggressive: long the third touch, SL below the trendline
• Conservative: long a breakup
• More conservative: long a retest of a break (if it comes)
• TARGETS: pull the fibs from the start of the move to the end – TP1= .382, TP2= .618, TP3= start of the falling wedge

43:40 – TRADING JOURNAL (EXPLAINED)

52:18 – BTC TA

• Bullish order block= the red candle that leads to a breakup. When you come down and retest it you expect it to hold

55:53 – LTC TA and Q&A