The following cheat sheet will help you to identify the most common technical chart patterns that appear in the forex markets. Click each heading for more information. Ascending Broadening Wedges The pattern resembles a megaphone with an upwards slant. It can appear in either an uptrend or a downtrend triangles continuation patterns forex at virtually any time scale.
But there can be pointers that make it bullish such as a break through of the upper resistance line. Descending Broadening Wedges This chart structure is the reverse of the ascending broadening wedge and looks like a megaphone with a downwards tilt. It doesn’t show a preference to uptrends or downtrends. Like the ABW the price funnels out from a lower support and upper resistance line. A break of the lower support line once the pattern is identified is a strong hint that the trend is likely to extend downwards for some time.
Rising Wedges A rising wedge in forex is usually a bearish sign, especially when it appears as a minor correction in a downtrend. It’s traded as a continuation signal. Rising wedges form as the price funnels between a support and resistance that are pointed towards each other. The market will be making higher highs. Falling Wedges Falling wedges are classically bullish signs and are seen as being stronger if they appear as a brief correction in an upwards trend. Like the rising wedge, the falling wedge often ends with a volatility breakout when either the lower support line breaks or the upper resistance breaks and the pattern ends.