Objective:Theoretical objective of the patternĪdvantage:Minimum objective very often achieved (91% of cases)ĭisadvantage:Pullbacks are common (72% of cases).It may therefore be wise to wait for the pullback to open a positionĮntry:Opening a long position on the 3rd contact with the support Stop loss:The stop loss is placed above the support Higher patterns perform better than the lower ones Trading strategies for right-angled ascending broadening wedges The traditional strategy:Įntry:Opening a short position at the support break
Pullbacks are detrimental to performance Bearish breaks perform better when the price line is in the lower third of the annual range and vice versa for bullish breaks The configurations that perform best are those that are preceded by a slight movement before the triangle is formed. The movement is much greater if there is an upwards exit In 44% of cases, there is pullback in the case of a bullish exit and 72% in the case of a bearish exit Notes on right-angled ascending broadening wedges In 91% of cases, the minimum objective of the pattern is achieved by using the technique of the maximum height of the triangle.In the event of a bearish exit, the percentage drops to 43%. In 70% of cases, there is a bearish exit Here are some statistics about a right-angled ascending broadening wedge: Graphic representation of a right-angled ascending broadening wedge Statistics of a right-angled ascending broadening wedge The price objective is given by plotting the top point of the triangle at its start where it breaks out.Another technique consists in plotting the maximum height of the triangle at the break out point. This pattern’s formation has to be preceded by a bullish movement.Although one could think that this pattern is a reversal pattern because of its shape, it is more likely a mark of a lack of buyers in the bullish movement, which does not manage to become sustainable. What is a right-angled ascending broadening wedge?Ī right-angled ascending broadening wedge is a downward reversal pattern.The pattern is formed by two diverging lines, the support is a horizontal line and the resistance is an oblique bullish one, so it is an inverted descending triangle.The oscillations between the two triangle terminals are therefore becoming increasingly large.Each line must be touched at least twice to be validated.Ī right-angled ascending broadening wedge reflects investors’ growing nervousness and indecision.If the pattern is not spotted quickly, the movements may appear totally random and thus trap many investors.
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