12. How to Trade the Wedge Chart Pattern Like a Pro Part 2

[saweaq1]

great video.. thank you

[massarde9591]

Hi David,

forgive my ignorance but how can you take 700 from 82.50-74.50 and when you replace 700 over the 76.00 how cant this cross the 82.50?

ex: 82.50-74.50=800 +74.50=82.50 where i am wrong?

could you explaing this, i am very bad in math ;p

[6448595]

hi . i have a question !!!

can we make 1000$ everday from forex

and is moving average enough

[royaljell604]

Hi Dave, very concise, very informative. I've been watching all day & I'm tired, but, what does 800 points represent monetarily? I'm new if the question is ridiculous that's why.  I'm going to watch them all. Total education here. It's appreciated. Thank you.

[johnsonm3012]

82.50-74.50=700? I'm a novice, so maybe I'm missing something. 8250-7450=800. How did you get 700?

[zhinghur]

Thanks for wonderful concept. All your videos rock.

[williamgen28]

hello. may ii ask whether i can apply these charts on different investment vehicles? e.g stocks, forex...etc

[rameshfinman]

Hi Dave, Great video, very educative series. Many thanks for posting 'em! I was just curious as to why you came up with 700 points as the target for the falling wedge reversal pattern. Is it just an arithmetic thing or am I missing something?

[nishantpant]

Hi, I was wondering if you use or could point me to a website/software to flag known patterns when they occur, then you could use human intervention to actually analyze the pattern flagged by the software to see if it is right.

In absence of a software, I cannot imagine how impossobly tedious it would be to scour through hundreds of stocks just looking for patterns.

[aniketwadkar]

Hi Nishant ,

Try Autochartist . Its good but I feel comfortable marking my own patterns .

Regards

Aniket Wadkar

[nsolcis]

what stock charting software do you guys suggest? i'm trading in bullion gold market

thanks

[csaba85]

thinkorswim

[nsolcis]

thanks so much, just signed up with an account with them!

[ordgstrn]

for anyone that is confused by these wedge patterns, a falling wedge basically means that prices in the market are going to rise and a rising wedge means that prices will fall. This simple rule applies to both an uptrend and a downtrend. Hope that helped.

[comtwah]

Hi Dave....

No I don't have a question...I just wanted to say

HAVE A GREAT DAY!

[rayzaraymond]

Hi Dave,

If a falling wedge occurs on an uptrend means that the correction is loosing steam. The correction is normally a much smaller run as opposed to the up trend. It doesn't make sense to me to set such a low profit target if we're predicting a continuation. Pls advise. Thanks.

[luckyload3r]

rayz, these patterns are normally for day traders, taking for small 5-10% gains, these patterns are usually for quick clean trades. But there are som major reversal-you gotta look for yourself and find them

[jerrykeyz]

Hi Dave,

Thank you for this lesson its very helpful. I have a big challenge though.

I don't know when to draw my trend lines. I figured out when its a falling wedge, the market reverses for a buy and vice-versa. Please correct me if I'm wrong.

My greatest challenge now is from which point to draw the line. Is there any sign I should look out for before knowing where to place my trend lines? Or I can just place it at any point.

I just stumbled into this, and I'm sorry if I'm taking you back. thnx

[navesele]

Trend lines are drawn between the last 2 or more resistance or support levels. Don't draw trend lines from the current (last to the right) candle. Pick the bottoms or tops that already took place. It is usually the sticking out wicks.

[ryanskinner01]

Hi Dave,

I have jst started watching and find this very helpful however i have one question?

when you calculate your points what is the calculation cause at 1:46 i see 82.5-74.5 and that is supposed to equal 700 points if you could clarify this for me i would appreciate that , and if you explain that in further videos then i apoligize

[hwsv07]

Hi Dave, good video. Love it.

Can a falling wedge pattern be not a reversal of pattern but a continuation of a down trend?

[InformedTrades]

generally people look at these as reversal patterns but they can certainly occur during a continuation of the move as well. Best Regards, Dave

[arcusdog]

Hi David, Love your videos! Thanks so much for sharing your knowledge in such a concise, and easily understandable manner!

I was wondering if you know of any software out there that can scan a large number of charts for different equities and pick out these different candlestick patterns for you?

Also, I hear some day traders say that certain stocks show up on their "alerts" and from there they decide whether or not to trade them. Do you know what they might be referring to?

Thanks!

[oseloth]

Hi

I don't understand the terms stop and brake point. What that means. When to sell and when to buy this stock for example?

[InformedTrades]

Hi, A stop is an order that you place to protect a position if the market moves against you.  A break point is when the market breaks out above or below a support or resistance line. Hope that helps. Best Regards, Dave

[fransdinkelmann]

Hi Dave,

I am new to the FX market and have been scanning the web for all the educational information available. Thus far I have found your website to be superior and the most complete and comprehensive available. I THANK YOU and ask that you please continue to set the standard, KUDOS!!

[InformedTrades]

Thanks for the comment and for watching I am glad you like the site. Best Regards, Dave

[fransdinkelmann]

I must have missed something... when did 82.50 - 74.50 = 700? please clarify. This is however the most informative and easily understandable lessons i have found...pease keep them coming...

[InformedTrades]

Hi, Thanks for the comment am glad you like the video. 700 is a typo that should read 800 points as a 1 point move in the market is from .01 to .02. Best Regards, Dave

[tannyjill]

hi, thanks for the videos, Im trying to absorb as much, i have a Q-so far i have seen 6 different patterns,how does one decide which pattern to take to make a decision of investment, or will i have to go through a check list ticking off saying this chart is ok with head n shoulders, down wedge pattern...., also pls could you tell what part of the candle stick do we use the fat body or the wick.

also please could recommend any books for beginners as i have no background in investment or finance

[markduff]

Hi , I think my question may be similar to the one just before mine but here goes.

When you are drawing the wedge / flag lines are you using the candle body or the wick ends as your connection point? Other course I've done seem a bit vague in this area in explaining this they simply say , some traders connect the wicks , some connect the bodies. Can you clarify this?

Thanks again for the great videos.

[InformedTrades]

Hi Markduff, Thanks for the comment. Wether a trader uses the body of the candle or the wick is really a matter of preference. For me personally I use whichever point in the candle makes the lines fit the best. There is a more in depth discussion on this over at InformedTrades I will shoot you the link so you can check that out if you want. Best Regards, Dave

[tannyjill]

dear markduff, did you get the link of dave , did it ans your question, as i am finding the same difficulty

[InformedTrades]

Hi Tannyjill,

Just sent you the link I refer to above. Best Regards, Dave

[BAOneironaught]

Hi,

Excellent program! I'm unclear as to how you are determining the start and end points of your top and bottom wedge lines. In your examples it seems inconsistent to me, in one you start the wide end of the wedge at the top and bottom of the trend line leading up to the reversal, yet in another it is contained soley in the downtrend of the reversal. Not sure if this makes sense but in short i guess I'm wondering how to clearly define the two wedge lines? Any clarity will help, thanks!!!!

[jtking2504]

Hi Dave,

Thanks for your great videos.

I'm a little confused about the calculations for 700 points, when I subtract 74.50 from 82.50 it comes to 8, could you please explain how you got the 700 points? Thanks.

[ForexFrenzy]

At last, the Wedges clearly explained. Great videos!

[InformedTrades]

Hi Forexfrenzy, Glad you liked it. Thanks for the comment and for watching. Best Regards, Dave

[watchthis12345678]

Hi David I am unsure on how you use STOP LOSS and BREAK points. Can you explain how to use that?

[InformedTrades]

Hi Watchthis12345678, Thanks for the comment. If you visit my channel by clicking on the InformedTrades banner to the right of my video, you will find a video there on stop losses (#99) as well as support and resistance (#5). Let me know if those do not answer your questions. Best Regards, Dave

[chasleo]

You say that you're projecting 700 points back up - but how frequently does that occur on intraday trading?

[InformedTrades]

Hi Chasleo, That would rarely if ever happen in intraday trading. If you notice in most of my lessons I am using a daily chart. While these patterns can be used on any timeframe in my opinion the longer the timeframe they are found on the more relevant the pattern is which is why I use longer term charts. Best Regards, Dave

[RoarRoar135]

Hey Dave! Thanks for the videos. Many times, I've notice that despite falling out of the wedge or many other patterns, they do move down/up for a little bit but rarely ever reach the projected point (difference between top and bottom). Usually, it'll sky rocket back up and I'll end up in negatives. So two questions...

1) How often does it reach the projected point?

2) If it never reaches that project point, when should you plan on getting out?

Thanks again Dave!

[InformedTrades]

Hi RoarRoar125, Thanks for the comment. How often it reaches the projected target is going to vary widely depending on a number of factors including the timeframe you are trading, the market volatility, and the instrument that you are trading so I can't speculate there. One thing some traders would consider doing in situations where they start off profitable and end up negative is using a trailing stop. You can learn about this on the free course page of InformedTrades in Module 6. Best,Dave

[aasyraf]

Hi dave

I dont understand how the Falling Wedge Continuation Pattern works. You mentioned that if it is seen on an uptrend, it is a continuation pattern. (meaning the prices will continue into an uptrend still, am I right?)

but in the example, 2:05, you highligted a downtrend and a reversal pattern, much similar like the Falling Wedge Reversal Pattern instead. The strategy is also for anticipating a reversal in prices.

Please advice. Thanks!

[aasyraf]

Okay wait I think I got it. At 2:05, the uptrend you were referring to is on the immediate LEFT of the wedge, not within the start and the end of wedge itself right?

[InformedTrades]

Hi Aasyraf, Thats correct although I see why you were confused when the video recorded the screen it kind of shrunk the chart down so the move downward that makes up the falling wedge looks larger in proportion to the uptrend to the left of the pattern than I would have liked it too. Thanks for pointing that out will fix it up in the next version. Best Regards, Dave