Srading.com

Menu
  • Home
  • Markets
    • Forex
    • Stock
  • Fundamental Analysis
    • Economics
    • Money & Banking
  • Technical Analysis
    • Drawing Tools
    • Chart Patterns
  • Tools
    • Online Charts
    • Economic Calendar
    • Interest Rate Today (Live Widget)
    • Forex Market Hours
    • Currency Indexes Chart
    • National Holiday Calendar
    • CoT Chart
    • Quotes

RISK WARNING: Trding financial assets come with a high risk of losing money. So, everything you read on this website is for educational purposes or personal opinions only

Read our DISCLAIMER
Home
Technical Analysis
Chart Patterns
Broadening Wedge Pattern: Types, Strategies & Examples
Chart Patterns

Broadening Wedge Pattern: Types, Strategies & Examples

December 10, 2022 Zafari

A broadening wedge pattern is a price chart formations that widen as they develop. In other words, in a broadening wedge pattern, support and resistance lines diverge as the structure matures.

If we compare broadening wedges, they are the flip side of regular wedges. In a regular wedge, the upper and lower lines of the formation converge, while in the broadening version, they diverge.

They are ascending and descending wedge patterns. And this article discusses them separately.

Ascending Broadening Wedge Pattern

An ascending broadening wedge pattern begins narrower and ends wider while its support and resistance lines rise. As it continues development, its trendlines diverge, and at the same time, both are rising.

An ascending broadening wedge pattern is a bearish continuation chart structure. And it appears in a downtrend.

Ascending broadening wedge pattern definition

Notice that this pattern completes when the price drop below its support line.

This structure can be tall or short at the end. If the pattern’s height is short you can sell after breaking the support line and put your stop-loss above the resistance line, and your take-profit should be at the starting level. On the other hand, if its height is tall, you can trade inside the pattern near the top or wait for a correction and put your stop-loss and take-profit levels based on smaller structures.

Example

The 4-hourly chart of the GBPUSD pair made an ascending broadening wedge from mid-July to mid-August.

Rising broadening wedge formation made in the GBPUSD price chart
GBPUSD chart by TradingView

On 15 August the price broke the support line of the pattern. After a pullback, it continued falling by making a bearish rectangle and a rising wedge pattern.

Descending Broadening Wedge Pattern

A descending broadening wedge pattern is the mirror image of the ascending broadening wedge.
Trendlines in this pattern diverge, and at the same time, they fall as the structure completes.

descending broadening wedge formation definition

A descending broadening wedge is a bullish continuation formation and appears in the middle of an uptrend. And this pattern completes when the price breaks the resistance line.

Like the ascending broadening wedge, this structure can be tall or short. Place your order above the resistance line, and trade inside if the pattern is tall. Treat your take-profit and stop-loss orders the same as the ascending pattern.

Examples

The weekly gold price chart made a descending broadening wedge formation that was completed in early 2009.

An example of falling broadening wedge formation
Gold price chart by TradingView

The price broke the resistance line of the formation at the $900 price level. Then, it continued rising by making bullish continuation patterns such as ABCD patterns.

Here is a price chart made of both ascending and descending broadening wedge patterns. Moreover, you also see a regular wedge.

Ascending and descending broadening wedge formations plus regular wedge examples
EURGBP chart by TradingView
Share
Tweet
Linkedin
Pinterest
Reddit
Email
Prev Article
Next Article
Tags:Forex Pattern Technical Analysis

Related Articles

Piercing Pattern (How to Trade & Examples)
What is Piercing Pattern? A piercing pattern is a bullish …

Piercing Pattern (How to Trade & Examples)

Shooting Star Candlestick Pattern (How to Trade & Examples)
The Shooting Star Candlestick Pattern is a single reversal candlestick …

Shooting Star Candlestick Pattern (How to Trade & Examples)

Top Reversal Candlestick Patterns
Recognizing reversal candlestick patterns is vital to the technical analyst …

Top Reversal Candlestick Patterns

Elliott Wave Theory Guide for Beginners
What is Elliot Wave Theory? Elliott Wave Theory (EWT) developed …

Elliott Wave Theory Guide for Beginners

Diamond Chart Pattern Explained [Example Included]
A diamond chart pattern can be both a reversal and …

Diamond Chart Pattern Explained [Example Included]

Pennant Pattern: Types, How to Trade & Examples
A pennant pattern is a continuation chart pattern that appears …

Pennant Pattern: Types, How to Trade & Examples

About The Author

Zafari

Zafari is a professional trader and has been in the financial market since 2014. He has a bachelor of public economics and an MBA. For some reason, he does not show his face. And he loves you all!

Leave a Reply Cancel Reply

  • Recent
  • Popular
  • Comments
  • Tags

Srading.com

QUICK LINKS

  • About
  • Cookies Policy
  • Terms & Conditions
  • Disclaimer
  • Privacy Policy
  • Contact Us

LATEST POSTS

  • Elliott Wave Theory Guide for Beginners
  • Top Continuation Candlestick Patterns
  • Top Reversal Candlestick Patterns
  • 6 Popular Continuation Patterns & How to Trade
  • 8 Popular Reversal Patterns and How to Trade Them

FOLLOW US ON SOCIAL MEDIA

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • Pinterest
  • Telegram
  • Reddit
  • YouTube

Trading financial assets are risky. Everything you read on this website is just for educational purposes or personal opinions only. Read our DISCLAIMER!

Copyright © 2023 Srading.com

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Refresh
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By continuing this website or clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Cookies Policy
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT