Archive for December, 2022

Falling Wedge Pattern Meaning, Chart, Breakout, How To Trade?

Tuesday, December 27th, 2022

If you do not agree with any term of provision of our Terms and Conditions, you should not use our Site, Services, Content or Information. Please be advised that your continued use of the Site, Services, Content, or Information provided shall indicate your consent and agreement to our Terms and Conditions. The logic is declining wedge that the vertical measure captures the entire preceding down move counteracted by built-up bullish energy. As that energy releases, it powers upside down by roughly that amount. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism.

What Type Of Trading Strategies Can Falling Wedge Patterns Be Traded In?

This usually occurs when a security’s price has been rising over time, but it can also occur in the midst of a downward trend as well. The chart below provides a textbook example of a falling wedge at the end of a long downtrend. Notice how price action is forming new highs, but at a much slower pace than when price makes higher lows. Strike offers free trial https://www.xcritical.com/ along with subscription to help traders, inverstors make better decisions in the stock market.

Is a Falling Wedge Pattern Profitable?

This ultimately led to Jay holding exchange seats and operating as a market maker on options exchanges in Chicago and San Francisco, initially on the Chicago Board Options Exchange. Jay also played a significant role in the Chicago Mercantile Exchange’s evolution, where he contributed to launching and actively trading the first listed currency futures options. After transitioning to the West Coast, Jay then held a seat and ventured into trading stock options and their underlying stocks on the Pacific Options Exchange.

Shark Pattern Explained. I Test Its Trading Profitability!

These patterns are formed by support and resistance, and the price will return to retest those levels to see if they hold. Here is another example of a falling wedge pattern but this time it formed during a corrective phase in Gold which signaled a potential trend continuation once the pattern completed. In terms of technicality – the breakout above the resistance trend line signals the end of the downtrend. As soon as the first candlestick is completed, the trader will enter a long position with a stop loss at the support line. A good take profit could be somewhere around the 38.2% or 50% Fibonacci levels.

What Is The Least Popular Timeframe To Trade Falling Wedge Patterns?

Notice that the two falling wedge patterns on the image develop after a price increase and they play the role of trend correction. Yes, Bollinger Bands can be very effective for trading wedge chart patterns. During the wedge, Bollinger Bands will taper inwards reflecting the consolidating price action. The breakout will be signaled when the price closes outside the upper or lower Bollinger Bands. Traders can then enter trades in the direction of the breakout with the bands used as dynamic support/resistance levels.

What Is the Falling Wedge Pattern and How to Trade It

This pattern employs two trend lines that connect the highs and lows of a price series, indicating either a reversal or continuation of the trend. Identifying a falling wedge pattern involves recognizing specific visual and structural characteristics of the falling wedge on a price chart. First, identify a prevailing downtrend in the market, where prices consistently form lower highs and lower lows. As the downtrend progresses, look for a narrowing price range between two converging trendlines. The first trendline, known as the downtrend line or resistance line, connects the declining highs.

Mistake 3: Neglecting Risk Management

It is important to note that between 74-89% of retail investors lose money when trading CFDs. These products may not be suitable for everyone, and it is crucial that you fully comprehend the risks involved. Prior to making any decisions, carefully assess your financial situation and determine whether you can afford the potential risk of losing your money. Read on to learn how to identify the falling wedge and use them effectively to inform your market decisions.

declining wedge

Falling wedges can develop over several months, culminating in a bullish breakout when prices convincingly exceed the upper resistance line, ideally with a strong increase in trading volume. Additionally, observe diminishing trading volume during the pattern’s development which indicates a decrease in selling pressure. Confirmation of a falling wedge often comes with a price breakout as the price moves above the upper trendline. Understanding these elements enables traders to identify and leverage falling wedge patterns for buying opportunities. Yes, the falling wedge is considered a reliably profitable chart pattern in technical analysis.

declining wedge

Then, draw a second declining trendline from left to right connecting the lower swing low prices together which is the pattern’s support level. During the falling wedge formation, traders observe a gradual decline in trading volume. This diminishing volume suggests a weakening of the strong selling pressure (red bars). Just like in the other forex trading chart patterns we discussed earlier, the price movement after the breakout is approximately the same magnitude as the height of the formation. While trading any pattern carries inherent risks, the use of prudent risk and money management methods is the cornerstone of just about any successful forex trading strategy. After drawing the converging trendlines and observing the decreasing market volatility, the next step involves confirming the falling wedge pattern’s validity.

Reversal trading means taking a position when the price reverses near the end of a wedge pattern, while breakout trading requires taking a position when the price breaks out of a wedge pattern. Falling wedge pattern is a reversal chart pattern that changes bearish trend into bullish trend. Wyckoff Accumulation & Distribution is a trading strategy that was developed by Richard Wyckoff in the early 1900s.

The Netflix price breakout occurs and the Netflix stock continues rising for multiple months where it reaches the profit target level. A falling wedge pattern short timeframe example is shown on the hourly price chart of Soybean futures above. The futures price drops in a downward direction before a short term falling wedge pattern forms. The Soybeans price breaks out of the pattern to the upside in a bull direction and continues higher to reach the exit price. The descending wedge pattern frequently provides false signals and represent a continuation or reversal pattern.

If the falling wedge occurs during a downtrend, the bears have been in control for some time and have been keen to push exchange rates lower, but their conviction weakens over time. After a panic sell-out by weak longs, a falling wedge pattern may develop. At the heart of the falling wedge pattern lies the intricate interplay of forex market participants’ emotions and the underlying supply and demand dynamics that determine market exchange rate levels.

If the falling wedge develops during an upward trend, it tends to signal a corrective downward phase in the forex market that is evolving in a set of converging and overlapping waves. Testing shows that there should be at least five waves in a falling wedge pattern, meaning that the price should touch the inside of the wedge five times. The descending wedge is a reasonably reliable pattern that, if used correctly, can improve your trading outcomes. Understanding how to identify and trade this pattern correctly is essential to taking advantage of potential profits. In both cases, we enter the market after the wedges break through their respective trend lines.

  • The falling wedge pattern is popularly known as the descending wedge pattern.
  • Traders can make bearish trades after the breakout by selling the security short or using derivatives such as futures or options, depending on the security being charted.
  • It’s essential to analyze the overall trend and market sentiment to determine whether the pattern aligns with the prevailing market conditions.
  • Additionally, the wedge is invalidated if the price breaks higher and lower than the wedge trendlines due to volatility.
  • If you have three highs, even better, each high should be lower than the preceding highs.
  • The falling wedge pattern, a technical chart formation, is characterized by two converging trendlines that slope downward.

TradingView’s powerful pattern recognition algorithms have autodetected this falling wedge pattern. TradingView detected the pattern and set a price target equal to the length of the wedge’s apex. Watch for the formation of a bullish wedge pattern above the MACD line when the market is in an uptrend. This combination is a useful tool for verifying the pattern’s validity and the likelihood that the market will go forward in a similar direction. Yes, the Moving Average Convergence Divergence is used to trade wedge patterns. You should keep an eye out for a bearish wedge pattern to develop below the MACD line provided the market is in a downtrend.

Yes, falling wedge patterns hold 74 percent of the time, according to decades of research compiled by Tom Bulkowski in his book The Encyclopedia of Chart Patterns. It is also important to remember that falling wedges can fail at a rate of 29%, and traders should always have an exit strategy in case of a failed pattern. Furthermore, managing risk during any trade is essential, as the potential for loss is still real.

declining wedge

The falling wedge is considered bullish, with a downward slant bounded by a descending resistance line but a rising support line which reflects selling pressure easing up faster than buying pressure. As you can see, the falling wedge pattern is formed at the end of the downtrend with three lower highs and two lower lows, and most importantly, a price consolidation at the end of the downward trend. In this article, we’ll explain how to identify and use the falling wedge bullish reversal pattern as a trading strategy.

The trend lines established above the highs and below the lows on the price chart pattern converge when the price fall loses strength and buyers enter to lower the rate of decline. Volume analysis is a key aspect of a falling wedge pattern’s confirmation method. During the formation of the falling wedge pattern, currency traders should observe how trading volume trends. Ideally, the trading volume should decrease as the pattern takes shape over time.

declining wedge

Conclusively, traders should look out for false trading signals while using wedge patterns. False breakouts result in losses, and it is difficult to evaluate the market’s trend because of the pattern’s ambiguous direction. Traders apply oscillators like the Relative Strength Index (RSI)  to get evidence of a potential price reversal signalled by a wedge pattern. For instance, a rising wedge formation and overbought circumstances on the RSI  indicate that a price reversal is more likely to occur. Similarly, a falling wedge formation and RSI that shows oversold conditions, signal towards an upcoming trend reversal. A wedge pattern is a price pattern identified by converging trend lines on a price chart.

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ANTONIA HOYLE on firms flogging women myth that drinking is empowering

Monday, December 26th, 2022

The meme pops up on my news feed after a stressful day, when I’m frazzled by the demands of working motherhood.

It is short, authoritative and, until recently, I would have found it funny: ‘Stop posting your problems on Facebook and start drinking like the rest of us.’

In a flash, I’m transported back to the evenings before I stopped drinking nine months ago, when downing wine was my instinctive solution to every worry.

This reminder of my old life, timed as it is, leaves me sorely tempted to start again. Had I not learned to manage my cravings — were I one of the 32.9 per cent of adults recently revealed to be drinking at risky levels — I would undoubtedly have caved.

As I force myself to remember the reasons I gave up — better mental health, reduced anxiety, improved productivity to name but a few — my temptation segues into curiosity.Why has Facebook shown me this meme in the first place? It looks like it has been posted by someone I know — but it hasn’t. Instead, I discover, it’s from a Facebook page called Wine Time that two of my friends ‘like’, meaning, thanks to the platform’s algorithm, it is more likely to appear on my own feed.

Followed by more than 768,164 people, since 2014 Wine Time has posted more than 6,000 memes — quirky photos with funny captions overlaid on them — endorsing alcohol.It targets its 85 per cent female audience by promoting wine as an empowering substance that deepens friendships and boosts confidence. Downsides, from hangovers to blackouts, are all part of the humorous draw.

'Blackout binges in my teens and 20s had morphed into less extreme but arguably more insidious drinking in middle age, when alcohol seemed to offer a way to 'take the edge off' everyday life,' Antonia Hoyle writes

‘Blackout binges in my teens and 20s had morphed into less extreme but arguably more insidious drinking in middle age, when alcohol seemed to offer a way to ‘take the edge off’ everyday life,’ Antonia Hoyle writes

In one meme, there’s a tumbler of red wine alongside the caption ‘because kids’.

Another has a picture of two women drinking with the words, ‘Friends bring happiness to your life . . . best friends bring alcohol.’ Others explicitly endorse binge drinking. Take this imaginary conversation captioned on a picture of two female friends. ‘Bestie: We met for coffee, how did we end up blacking out?!

Me: I took your idea and made it better’ [accompanied by a smattering of wine emoji].

I have spent nine months learning how detrimental my relationship with alcohol could be — how, far from boosting confidence, it fractured friendships and sabotaged my self-esteem.

Blackout binges in my teens and 20s had morphed into less extreme but arguably more insidious drinking in middle age, when alcohol seemed to offer a way to ‘take the edge off’ everyday life.Until feelings of burnout and paranoia grew so strong I wondered if a life without alcohol might not be happier.

Now, I feel angry that an account that so unapologetically normalises alcohol abuse among women is allowed to exist. I realise it is far from the only social media account advocating alcohol as a feminist activity.

You’ve probably seen some of the memes yourself — from ‘Wine is to women, what duct tape is to men, it fixes everything’ to ‘What kind of wine pairs with smashing the patriarchy?’

And while Wine Time has no overt links to the alcohol industry, the major alcohol manufacturers, having saturated the male market, are now subtly exploiting a similar narrative to sell their products to women.

In a research paper published this year — ‘Pretty in Pink’ And ‘Girl Power’: An analysis of the targeting and representation of women in alcohol brand marketing on Facebook and Instagram — academics studied 2,600 social media posts from alcohol brands between 2019 and 2020.They found gendered marketing is widespread.

The ‘pinkification’ of products has been well-documented (think the huge growth of rose wine and #drinkpink promotions) but brands also show alcohol as ‘an essential component of female friendship’, emphasising its importance by talking about ‘besties’ and ‘BFFs’.

They encourage us to tag each other in their social media posts, and bill alcohol as a way of turning back time and relinquishing responsibilities.As I entered middle age, I swallowed this sales pitch unthinkingly to legitimise my drinking and most women still do. (‘Aren’t you worried you’ll lose all your friends?’ and ‘How do you deal with stress if you don’t drink?’ are two of the most common questions I’m asked since quitting.)

Antonia says that 'the major alcohol manufacturers, having saturated the male market, are now subtly exploiting a similar narrative to sell their products to women'

Antonia says that ‘the major alcohol manufacturers, having saturated the male market, are now subtly exploiting a similar narrative to sell their products to women’

But there was nothing feminist about my behaviour when I was binge drinking. It reduced my interaction with friends to repetitive rants and lowered my inhibitions to the point where I’d spill best friends’ secrets and stagger off.

It put me in a constant state of stress so work deadlines felt insurmountable and I was exhausted, not empowered, by those ‘medicinal’ glasses of wine during ‘mummy time’ that left me sleeping poorly and waking racked with shame.

Once, booze was advertised as a way to attract romantic partners, but brands are now aligning themselves with feminist causes.Diageo, one of the world’s biggest alcohol companies, whiuch makes Smirnoff and Baileys, has sponsored International Women’s Day.

Absolut vodka has backed a charity fighting against sexual violence and pop star Ellie Goulding’s new alcoholic drink, Served, posted on social media about donating revenue to a charity campaigning against female homelessness.Yet how feminist is it for an alcohol brand to support an end to sexual violence, when 39 per cent of victims of rape or assault say they were under the influence of alcohol?

The same number say the perpetrator was also under the influence and men dependent on alcohol or drugs are six to seven times more likely to abuse their partner.

These same companies are (understandably) lobbying against one of the few measures the World Health Organisation says can help reduce alcohol abuse — increasing the taxes on alcohol so it costs more.

‘Alcohol companies are targeting women with messages of empowerment and feminism,’ says Dr Athanasia Daskalopoulou, Senior Lecturer in Marketing at the University of Liverpool Management School.’Yet the only thing they’re empowering women to do is engage in harmful behaviour.’

‘Big Alcohol’ — an industry worth an estimated £46 billion in the UK — is not solely responsible, of course. This damaging narrative is overwhelmingly spread through social media platforms, which seem unwilling, or unable, to stop it.

Where do all these posts extolling heavy drinking come from?Do women really feel strongly enough about wine to make hundreds of celebratory memes?

There is no sign of who runs the Wine Time Facebook page — a site that, despite having been in operation for eight years and boasting a monthly organic (that is, not via ads) reach of 28 million viewers, had yet to complete Facebook’s ‘verification process’ when I came across it this summer.Curious, I emailed the address provided on the page to ask who had set it up, but received no reply. When I contacted the page via Facebook messenger, nobody responded — my messages don’t even show up as ‘read’.

I get asked ‘How do you deal with stress if you don’t drink?’ 

The only clue as to Wine Time’s origin is a LinkedIn account, which describes it as a ‘social media marketing specialist’ based in Northern Ireland that is ‘looking for advertisers’.In other words, explains internet security expert James Bore, ‘I expect they have built up a following using these wine memes so they can monetise the site with adverts, whether that’s from the alcohol industry or elsewhere.

‘Given the huge number of posts, it could be they are automated, with a human only commenting on the page every now and again to make it look more authentic.It might look like a personal account, but it’s very much intended as a business. It’s legal, but not necessarily ethical.’

On Instagram, Drunk Moments UK, with 30,000 followers, posts regular memes with captions such as, 'Friends: please don't black out again. Me: I won't.' (accompanied by a picture of a woman winking). Stock photo used

On Instagram, Drunk Moments UK, with 30,000 followers, posts regular memes with captions such as, ‘Friends: please don’t black out again. Me: I won’t.’ (accompanied by a picture of a woman winking).Stock photo used

So should Facebook allow it? Alcohol is a drug that causes seven types of cancer and is set to cost the NHS £5.2 billion over the next 20 years. Facebook bans tobacco advertising and gambling adverts are only allowed with written permission from the company.Yet the account remains after I reported it — twice — to Facebook on the grounds that, as a business page, it hasn’t completed its verification process and does not say who it is run by. There are plenty of similar groups, whose creators are also often unknown.

On Instagram, Drunk Moments UK, with 30,000 followers, posts regular memes with captions such as, ‘Friends: please don’t black out again. Me: I won’t.’ (accompanied by a picture of a woman winking).

Another account, Women Who Love Wine posts ‘Wine tastes better when your mental health is sh*t’ and ‘The first drink after a long day of work doesn’t count; it just levels your mood back to normal.’

On TikTok — where branded content promoting alcohol is globally prohibited — 98 per cent of the top 100 videos using the hashtag #alcohol contained positive portrayals of alcohol, according to a study in the Journal of Studies on Alcohol and Drugs last year (TikTok claims this study is not representative of most users’ experiences).It also found alcohol consumption on the site is associated with friendship, which certainly tallies with the #imgonnabehungover viral trend on the site this year.

Started by the all-female trio Haim, who sang gleefully about how they were going to ‘drink a bunch of different drinks’ to ‘be hungover’ en route to the Oscars, the jokey song sparked millions of almost entirely female copycat renditions, including one by TV presenter Holly Willoughby, with two female friends.Watching it on Willoughby’s Instagram this April prompted nostalgia for my drinking days, despite knowing the song presented a worrying façade — 12 per cent of people report feeling anxious with a hangover. It can alter our brain chemistry for up to ten days. Of course, no alcohol manufacturer is allowed to endorse drinking to excess and the Advertising Standards Authority doesn’t let brands link consumption of alcohol to increased popularity or confidence.

Yet the idea that alcohol can consolidate friendships and improve wellbeing is implied, if not overt.Wine company Blossom Hill recently described the key components of summer as ‘sunny days’, ‘best friends’ and ‘delicious wine’ and launched a 30th birthday Facebook campaign with Love Island presenter Laura Whitmore, filmed sipping rosé.

The campaign aligns itself with feminist ideals with the line, ‘Let’s kick those expectations around ageing to the curb [sic].’

Fellow wine label Echo Falls also suggests wine is conducive to friendship on social media, with pink-coloured Instagram memes such as ‘That one friend who is most definitely a bad influence .. . But also the best on a night out’ accompanied by the hashtags #WineTime and #BFF.

While alcohol manufacturers stress the importance of drinking ‘responsibly’, few specify what that actually means — unsurprisingly, given one study found the industry would take a £13 billion hit if consumers complied with recommended guidelines.

Another account, Women Who Love Wine posts 'Wine tastes better when your mental health is sh*t' and 'The first drink after a long day of work doesn't count; it just levels your mood back to normal.' Stock photo used

Another account, Women Who Love Wine posts ‘Wine tastes better when your mental health is sh*t’ and ‘The first drink after a long day of work doesn’t count; it just levels your mood back to normal.’ Stock photo used

Some seem to poke fun at attempts to cut down: Echo Falls posted an Instagram meme in January 2020 that read, ‘Dry January Inspiration — Dry White Wine — Dry Red Wine’ and this summer Blossom Hill’s Facebook account advised: ‘When experiencing a heatwave, it’s important to stay hydrated’ — with a winking emoji.

Most insidious of all, perhaps, is the sponsoring of feminist movements and events.

Baileys sponsoring the Women’s Prize for Fiction, for example. In 2018, Smirnoff launched an ‘Equalizer’ campaign to boost female artists on music streaming platform Spotify, while Absolut launched a social media campaign called #sexresponsibly in 2020, to shine a ‘spotlight’ on the issue of consent.

It partnered with RAINN, an anti-sexual violence organisation, to implement campaigns to stop people from using alcohol as a tool to excuse or violate consent.

Admirable? Perhaps. Yet a cynic would argue Absolut’s parent company Pernod Ricard stands to gain most.Nowadays, most of us know alcohol damages health, so the idea it can somehow enhance our lives is tempting to cling to as an excuse to keep drinking.

The unpalatable truth — that alcohol is a toxin that can leave us feeling lower than we ever would without it — is altogether more difficult to swallow.