The Wedge Formation, also known as the Wedge Formation, is a type of formation that is formed when the prices in the market move in the form of an “arrow”, up and down. Although it has similarities with the triangle formation, the wedge differs due to its formation process and appearance. In addition, if it occurs in less than 2-3 weeks, this formation type is also called Wedge Formation.
What is the Wedge Formation?
The Wedge Pattern has a similar appearance to the triangle patterns. However, there are obvious aspects that differ from triangles. This formation can occur in 2-3 weeks to several months. It is called a “wedge” that is completed in a shorter time. Difference between wedge and wedge formation are at the time of formation. In order to comment on the formation, it is necessary to wait for the support or resistance line to be broken. In the regions where the formation narrows, the trading volume decreases. This indicates that the demand of the buyers in the rising wedge and the demand of the sellers in the descending wedge decrease.
The lines forming this formation are formed in two directions, inclined upwards or downwards, resembling an arrow. For this reason, they are divided into two as the Rising Wedge Formation and the Descending Wedge Formation.
Rising Wedge Pattern
When this pattern is seen, prices have started to rise for a certain period of time. Ascension comes after a period of reaction. It can be predicted that the downward trend will continue with the break of the support line of the formation. In short, you are faced with a pattern that confirms that the trend will continue. If the ascending wedge is seen within the uptrend, it can be considered a trend reversal pattern.
Descending Wedge Pattern
When this formation was seen, prices entered the correction process for a certain period of time and decreased. It is predicted that the upward trend will be seen when the resistance line of the formation is broken, that is, it is thought that the trend will continue. With the break of the resistance line of the formation, the upward trend will continue.
