Trading: Technical Analysis Masterclass: Master the financial markets by Rolf Schlotmann & Moritz Czubatinski

Author:Rolf Schlotmann & Moritz Czubatinski [Schlotmann, Rolf]
Language: eng
Format: epub, pdf
Published: 2019-02-16T23:00:00+00:00

5.4.2 The wedge as a trend continuation

The example in figure 43 shows a wedge that has formed during a correction phase in an overall downward trend. The wedge phase is marked with dotted lines. Although the wedge shows higher highs and higher lows, the highs flatten and the buyers cannot get the upward trend to work.

Such a wedge formation becomes a continuation when the price fails to make a new high. The downward trend continues when the wedge is broken to the downside and the price continues to make lower lows. The continuation point is marked with an X in figure 43. Sometimes, such a pattern is also referred to as a flag.

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