Variations of the Rising Wedge Pattern

• Bearish Reversal:
  Occurs during an uptrend when price struggles to push higher. Bulls lose momentum and bears take control, causing a breakout downward.
  
• Bearish Continuation:
  Appears after a strong downtrend during a price retracement higher. With no real momentum behind the bulls, price breaks down to continue the bearish trend.
  

Trading the Rising Wedge

The key trading strategy with Rising Wedge Pattern involves waiting for a confirmed breakout below the wedge. Conservative traders wait for a candle close beneath the support line. The price target is the height of the wedge, measured downward from the breakout.

Always use stop-loss orders just above the last high inside the wedge to manage risk.

Summary

The rising wedge is a vital bearish chart pattern, effective in both reversal and continuation setups. Recognizing its structure helps traders avoid bullish traps and prepare for bearish momentum.

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