馃攳
Simple Wedge Trading Strategy for Big Profits ( Pure Price Action Trading ) - YouTube
Channel: Power of Trading
[17]
the wedge trading strategy is a reversal聽
trading strategy that has the potential聽聽
[22]
to generate big profits which trading is one聽
of the most effective methods for identifying聽聽
[30]
breakouts and finding profitable trading聽
opportunities when it comes to price action聽聽
[36]
trading the most important thing is recognizing聽
certain patterns in the market our team at power聽聽
[43]
of trading has dedicated a lot of time to teach聽
you the most popular and profitable price patterns聽聽
[51]
similar to the head and shoulders price pattern聽
strategy like most price patterns you'll be able聽聽
[59]
to trade this pattern on any market and on any聽
time frame no matter what type of trader you are聽聽
[66]
swing trader day trader and scalper you can make聽
big profits trading the falling wedge pattern聽聽
[75]
note no technical indicators are required聽
to trade the wedge trading strategy聽聽
[81]
this is because we are dealing with聽
a pure price action trading strategy
[87]
falling wedge pattern explained it's important聽
to recognize that the falling wedge pattern聽聽
[94]
it has two parts in its price pattern structure聽
one the primary characteristic of a falling wedge聽聽
[101]
pattern is that we need to have a bearish trend聽
before the pattern develops this is because it's聽聽
[107]
a reversal pattern two part two is the actual聽
falling wedge pattern which looks like a triangle聽聽
[114]
that is pointing down now how to recognize聽
the price structure of a falling wedge pattern聽聽
[122]
you need to have a series of lower highs followed聽
by a series of lower lows the more the better each聽聽
[130]
lower point should be lower than the previous聽
lows and each higher point should be lower than聽聽
[135]
the previous high however as we approach the end聽
of the falling wedge pattern you'll notice the聽聽
[142]
price will fail to make lower lows while the聽
falling wedge pattern develops you'll notice聽聽
[149]
the length of the swing waves become tighter and聽
tighter especially as we move to the downside and聽聽
[156]
at some point in the future the two trend lines聽
that connect the highs and the lows will converge聽聽
[164]
the falling wedge pattern is not confirmed until聽
it's breaking to the upside resistance we can聽聽
[171]
definitely say there are some characteristics聽
in common between a falling wedge pattern and聽聽
[177]
a bullish flag pattern but the difference is聽
that the flag pattern is more of a short-term聽聽
[182]
aggressive pattern while a wedge pattern is more聽
of long-term price action we also have training聽聽
[190]
for the best short-term trading strategy before聽
jumping into the rules of wedge trading strategies聽聽
[197]
we still need to define our second favorite聽
pattern the symmetrical wedge pattern symmetrical聽聽
[204]
wedge pattern explained the symmetrical wedge聽
pattern is another simple price action pattern聽聽
[211]
it is constructed much the same as the falling聽
wedge pattern the symmetrical wedge pattern聽聽
[217]
has the shape of a symmetrical triangle it can聽
be recognized by the distinct shape created by聽聽
[224]
two diverging trend lines this is identified聽
by drawing two trend lines one one downward聽聽
[232]
resistance trend line that connects a series of聽
sequentially lower peaks two one upward support聽聽
[239]
trend line that connects a series of sequentially聽
higher lows and at some point in the future the聽聽
[246]
two trend lines that connect the highs and the聽
lows will meet together at the right side of聽聽
[252]
the pattern there are many opportunities聽
to trade the symmetrical wedge pattern聽聽
[258]
this pattern can appear at the end of a bullish聽
trend as well as at the end of a bearish trend聽聽
[265]
more than simply being a reversal pattern this聽
can also be traded as a continuation pattern聽聽
[272]
often times a breakout of either of the two trend聽
lines will lead to a volatile directional move聽聽
[280]
your job as a trader is to patiently wait聽
and only enter once the breakout occurs聽聽
[286]
now let's see how you can effectively聽
trade the falling wedge pattern and the聽聽
[291]
symmetrical wedge pattern simply follow聽
the wedge trading strategy rules below聽聽
[298]
wedge trading strategy rule buying opportunities聽
is a general rule we have to keep in mind that the聽聽
[306]
longer the market consolidates between the upper聽
and lower limits of the falling wedge pattern and聽聽
[312]
the symmetrical wedge pattern the higher the odds聽
of a breakout happening sooner rather than later聽聽
[320]
first we are going to focus on the falling聽
wedge pattern because it has the potential聽聽
[325]
for outstanding profits to be made step聽
one wait until you can spot on the price聽聽
[332]
chart the structure of a falling wedge pattern聽
and draw the two trend lines that connect the聽聽
[338]
highs and the lows we are just looking for that聽
visual representation of a falling wedge pattern聽聽
[345]
so the more compressed the pattern is the聽
better eventually we'll break to the upside聽聽
[352]
the volatility behind the breakout will聽
push the price higher very fast note聽聽
[359]
oftentimes you'll find that the shape and the聽
price structure of a falling wedge pattern can聽聽
[364]
vary from pattern to pattern ideally as long聽
as we follow the definition given earlier聽聽
[372]
we are good to trade any falling wedge pattern聽
that respects those rules next we need to figure聽聽
[378]
out where we need to get into the trade聽
which brings us to the next step step two聽聽
[384]
by when we break and close above the downward聽
resistance trend line it's important before the聽聽
[390]
breakout to see the price contracting within聽
the two trend lines so when the price hits the聽聽
[397]
resistance trend line the sellers will step in聽
and when the price hits the support trend line聽聽
[402]
the buyers will step in ultimately we are getting聽
the price squeezed inside this range bound action聽聽
[410]
as we get tighter and tighter that's what we聽
are focused on as the build-up in pressure聽聽
[416]
will eventually lead to a breakout in order to聽
avoid possible false breakouts we're also going聽聽
[423]
to wait for a close above the upper slope before聽
we actually buy note we need to have enough energy聽聽
[431]
and enough momentum to break above the upper聽
resistance level of a falling wedge pattern if you聽聽
[437]
still have problems identifying a genuine breakout聽
we highly recommend having a quick look at our聽聽
[443]
breakout trading strategy used by professional聽
traders now that we are in a trade we need to find聽聽
[451]
our target which brings us to the next step step聽
3 take profit once we break above of the origins聽聽
[459]
starting point of the falling wedge pattern the聽
starting point of the falling wedge pattern as our聽聽
[465]
first wall of resistance and obviously we want聽
to cache our profits at the first trouble area聽聽
[473]
this is a more conservative target alternatively聽
you can trail your stop loss below each swing low聽聽
[482]
and try to catch as much as possible from the聽
new trend now that we have a good understanding聽聽
[489]
of where to take profits there is still one聽
more thing left that we need to take care of聽聽
[495]
which is the stop loss placement step four place聽
the protective sl below the last swing low before聽聽
[503]
the breakout the place we are going to hide聽
our stop loss is quite intuitive to figure out聽聽
[509]
the last swing low before the breakout can聽
provide us with a very attractive low risk聽聽
[515]
in comparison with the potential profit available聽
a break below the last swing low will invalidate聽聽
[522]
the falling wedge price structure so we want聽
to minimize our losses and get out of the trade聽聽
[529]
note asterisk the above was an example of a buy聽
trade for a sell trade we need to trade the cousin聽聽
[537]
pattern which is the rising wedge pattern use聽
the same rules but in reverse for a sell trade聽聽
[546]
the symmetrical wedge pattern follows the聽
same wedge trading strategy rule but the only聽聽
[552]
difference is that we have a more practical聽
way to measure our profit target as for our聽聽
[558]
profit target we are going to measure the distance聽
between the highest point and lowest point of our聽聽
[564]
symmetrical wedge pattern and you're going to add聽
that distance to wherever the breakout price is聽聽
[571]
the reason why we've chosen to use the falling聽
wedge pattern and the symmetrical wedge pattern聽聽
[577]
because people won't realize what is developing聽
until after the breakout but if you train your聽聽
[584]
eyes to spot these price patterns in advance big聽
profits are waiting for you down the line you can聽聽
[591]
also trade with the breakout triangle strategy聽
the psychology behind the falling wedge pattern聽聽
[598]
is that as the price action narrows down the聽
buyers become more aggressive while the sellers聽聽
[603]
don't have enough power to continue pressing down聽
the paddle if you compress an object hard enough聽聽
[611]
after it reaches a maximum level of compression聽
it will snap back hard the same principle can be聽聽
[618]
applied to the falling wedge pattern which is the聽
reason why it has such a tremendous potential to聽聽
[624]
make substantial profits thank you for watching聽
please leave a comment below if you have any聽聽
[631]
questions about which trading strategy also please聽
give this strategy a one like if you enjoyed it
[642]
press the bell icon on the youtube聽
app and never miss another update
Most Recent Videos:
You can go back to the homepage right here: Homepage