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Wedge Chart Patterns

Rising Wedge Pattern on Bitcoin

Rising Wedge Pattern on Bitcoin

Rising Wedge Pattern on Bitcoin is a classical chart pattern which is located at the end of a huge drop. It is a bearish pattern. And, it should suggest a continuation.

The premise

Let’s take a look at the four hours chart of BTCUSD (Bitcoin). We’ll see that there is an obvious downtrend. And, at this time we can easily see the rising wedge pattern. So, this rising wedge is a bearish pattern when it appears in a downtrend. It can has bullish implications only when it appears in an uptrend like you can see in this article: Rising Wedge Pattern on #PG. But, in our case this pattern is bearish. Therefore, let’s see how I traded it.

rising-wedge-pattern-on-bitcoin
Rising wedge pattern on Bitcoin 4 hours chart

How did I trade the rising wedge pattern on Bitcoin

Usually in all the classical chart patterns you should establish the breaking point before you place an order. So, I did the same in this case. Therefore, I placed my sell stop order slightly below the support of the double top located at the end of the wedge.

The outcome

If we take a look again at the chart, we’ll see the perfect reason why I trade only right-angled patterns. You can read more here: What is Capital Patterns and what it is not. Therefore, the tendency of the patterns to morph is the main reason why I don’t trade on intraday charts and why I don’t trade diagonal patterns. The same also happened with my previous two trades: #FB and #MCD.

the-outcome-of-the-rising-wedge-pattern-on-bitcoin
The outcome of the rising wedge pattern on Bitcoin 4 hours chart

The conclusion

I hope that is more clear now the fact that most of the patterns will morph into larger patterns. This is one of the most important thing to remember in trading because it is one of the foundations of the classical charting principles. And this will also help you to keep a better profitability rate.

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