![]() Wedges can take a number of different shapes, and traders may sometimes feel like they’re forcing a wedge pattern onto a price chart rather than identifying one organically. While wedge patterns are common, identifying them isn’t always cut-and-dried. ![]() This is why a stop-loss is so crucial for successful wedge pattern trading. While the wedge pattern does illustrate a consolidation taking place with a currency pair, the setup can often prove false, with price movement continuing in its upward or downward direction after the wedge has been fully created. Wedge patterns don’t always signal a price reversal.But as part of your forex trading strategy, wedge patterns can be regularly used to identify breakout opportunities. Many patterns can offer value in providing signals for traders, but they’re only sporadically seen on forex charts. Wedge patterns are widely found on forex charts.This makes it easy to identify a trade opportunity-including when you can expect price action to occur. ![]() While some chart patterns can be more imprecise at predicting price movements, a wedge pattern setup typically offers very specific levels where entries should be made, and where a stop-loss should be set to guard against losses.
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