The rising wedge and ascending triangle patterns are essential tools that assist the traders in making informed decisions; they help predict the price fluctuations that are integral to any financial asset – cryptocurrencies or stocks.
These two patterns come with their own unique purposes and features. Let us find out more about them below.
A rising wedge pattern shows up on an inconsistent chart that appears as a result of a narrowing amplitude. If you connect the highs and lows, these two lines will take the shape of an imaginary angle, which gradually narrows down. Furthermore, the inclination of this angle is supposed to be positive, i.e., the corresponding corer should be pointing up, signaling an uptrend. A rising wedge pattern is generally a bearish reversal pattern, but there are exceptions.
Typically, this pattern is not easy to spot as it is commonly formed. However, despite the fact that bulls and bears appear in balance while the rising wedge line narrows gradually, it can be regarded as the supply is winning. At last, the buyers break down, and the sellers dominate the market simultaneously. In order to understand how the price changes could happen in the upcoming phase, the buyers and sellers use the rising wedge pattern and analyze the signals.
An ascending triangle pattern generally occurs on an uptrend, thereby enduring the price movement in the same direction. Generally, a reverse pattern is considered a trend continuation pattern. Therefore, don’t be surprised if you notice an ascending wedge triangle as a continuation pattern. However, this is not an all-inclusive criterion for ascending wedge triangles because, in some cases, the pattern appears to succeed in a downtrend and, in turn, reverse the price. Therefore, it is wise not to group this pattern into the rise, fall, continuation, or reversal.
Now that you have a clear picture of a rising wedge pattern and an ascending wedge pattern let’s move on to their differences.
What is the difference between a rising wedge and an ascending wedge triangle?
There are various similarities between a rising wedge and an ascending wedge pattern; for example, they offer clear entries and exist for the traders. If you are a beginner in their field, most likely, you will confuse these patterns with each other as their appearance is almost the same. However, even though they look identical and serve the same functions, differences should be discussed.
The resistance line is the primary difference between these patterns because, in ascending pattern, the line is horizontal. Obviously, a horizontal line does not have a slope, and the support line leans towards convergence. In order to avoid confusion, you can keep an eye on its behavior once the pattern is formed completely. The ascending trade is considered more ideal for trend continuation, and on the other hand, the rising wedge pattern is regarded as a reversal pattern. If you wish to expand your knowledge of the patterns, try focusing on the volume. Volume is generally higher for downswings on a rising wedge. On the other hand, the triangle pattern has a high volume on the upswing.
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The rising wedge and the ascending triangle patterns are the most common price action trading tools. The rising wedge is a reversal pattern, while the ascending triangle is mostly a continuation pattern. The resistance line is the key difference between these two patterns. The patterns are easy to spot, but false breakouts are more probable. To make better trading decisions, it is important to learn about these patterns and get the hang of them to use them effectively.
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