This time I will be showing you how to trade successfully the Falling Wedge – one of the best chart patterns in Forex. The video will demonstrate you the pattern in action and the consequences of its confirmation.

Falling Wedge Pattern Trade

1. After a sharper price decrease, the price slowed down its intensity and it demonstrated sideways attitude.
2. The consolidation had slight bearish inclination, though.
3. However, the bottoms of the consolidation were decreasing with lower intensity than the tops.
4. This created a Falling Wedge pattern on the chart.
5. The confirmation of the pattern came with the Falling Wedge breakout through the upper level.
6. This affirmed the bullish potential of the pattern, which was the reason to tackle the situation with a long trade.
7. However, the breaking candle was bigger than expected and it achieved about half of the wedge’s potential.
8. For this reason, I waited for a pullback before I entered the long trade.

Stop Loss and Target of the Bullish Falling Wedge Trade

I placed a Stop Loss order below the last top of the Falling Wedge. This way I protected my trade from eventual unexpected price moves against my trade.

Also, I followed the Rising and Falling Wedge rules to determine my target in this trade. I measured the vertical distance between the upper and the lower level of the Falling Wedge in its widest part. Then I applied this size upward starting from the moment of the breakout.

Live Trading Example

The entry point on the chart came a bit later than than I expected. It appeared that the price action created one more swing inside the wedge prior the breakout. Then I had to wait for a pullback in order to regain some of the already passed distance caused by the big breaking candle. Almost 4 hours later the target was completed.

Bottom line, the trade generated 10 pips which equals to approximately 0.15% profit.

Muhammad Awais