How to trade a Falling Wedge
by Kamil Schumann
A Falling Wedge looks like an elongated triangle that slopes downwards with the price spiralling lower between two converging trendlines. It is usually found in uptrends as a continuation pattern that slopes agains the prevailing trend. Sometimes, the falling wedge may materialize at the end of a prolonged downtrend where it can act as a reversal pattern. Volume decreases during the formation of the wedge and should expand on the breakout.
Profit Target - can be measured by adding the width at the top of the pattern to the point of breakout.
Example - This weekly chart of CRDN shows a Falling Wedge in an uptrend.
Trading Tip - A Falling Wedge may be traded as a reversal pattern but leads to much better trades as a continuation pattern that forms on a decrease in volume in well established uptrends where it can mark the halfway point of a major move.
Kamil Schumann
http://sharesmadeeasy.com/
Join in and write your own page! It's easy to do. How?
Simply click here to return to Tips and Tricks.
Trading Course
Trading Master Plan
This is one of the few trading courses on the market right now that is actually worth buying.
You get a 200 page e-book, trading video tutorials, chart lessons, and mp3 audios.
Also includes unlimited personal email support from Dave himself.
Zecco Broker
Open a Zecco Trading account
This is the broker I use. You get 10 free trades a month with no fees or commissions. Perfect for those new to trading stocks.
Market Club
7 Trading Lessons
Learn 7 trading tips and tricks in video format and watch the "90 Second Trading" series. These videos are free from the folks over at MarketClub.
Elliott Wave Video
Elliott Wave Video Series
In this 3 part video series, you will learn what the wave principle is, why you should pay attention to it, and how to trade it.
This course is free from the folks over at Elliott Wave International.
Trading Videos
Ino TV Premium
Now you can learn to trade from some of the top traders in the business with access to a library of over 500 trading seminars.
You can access these trading videos online from any computer 24 hours a day, 7 days a week.
Trading Guide
Swing Trading Guide
This trading course has some unique trading tips and tricks that you won't find in other courses. Comes with a trading calculator and some special reports that are loaded with trading information.
Related Reading
The Encyclopedia of Technical Market Indicators: "This encyclopaedia provides an alphabetical and up-to-date listing of hundreds of important market indicators. It defines what each indicator is and explains the philosophy behind the indicator."
