A must-see for beginners, the wedge of the dealer's layout!

The wedge is similar to the flag, and both belong to the adjustment pattern in the short term. From the perspective of shape, both figures are like flags hanging on flagpoles, but the flag is a parallelogram, while the wedge is two upper and lower necklines, which will cross in the short term to form a flat triangle, shaped like a pennant.

The wedge often appears on the way up or down, because no matter whether it is a strong rise or a sharp fall, the price cannot keep rising or falling, and there will be a time to rest. When the market rests, the K-line trend often appears in a wedge shape. The wedge can also be said to be a gas station for the long or short side, and the stay time is generally not long. Once the gas is filled, the price will start again. The wedge trend can generally be divided into an ascending wedge and a descending wedge.

Characteristics of rising wedge:

1. It is formed by the intersection of the upward sloping resistance line and the upward sloping support line;

2. The inclination angle of the support line is larger than that of the resistance line, and the low point rises faster than the high point;

3. It appears in an upward market as a reversal signal; it appears in a downward trend as an adjustment signal.

The characteristics of the falling wedge are opposite to those of the rising wedge. However, after the falling wedge breaks through the resistance line, it will not change as quickly as the rising wedge. Its price curve will most likely form an arc bottom and then rise slowly.

When investors encounter a wedge consolidation pattern, what are the operation strategies?

Operation strategy of rising wedge: When the stock price breaks through the lower line of the rising wedge, investors should immediately clear their positions.

Operation strategy of falling wedge:

1. After the index (currency price) breaks upward (3%), a buying strategy can be adopted.

2. When the index (currency price) does not break the downward trend line during the backtest, you can buy more.

3. The estimated minimum increase in the index (currency price) in the future is the high point of the wedge.

Key points of the falling wedge pattern:

1. The upward breakthrough of the falling wedge must be accompanied by trading volume, and after the index completes the breakthrough, it often has a trend of retracing the downward pressure line of the wedge.

2. The intersection formed by the extension of the two lines is often the support point of the future index.

3. If the falling wedge breaks upward at two-thirds of the head and the bottom, the effectiveness of the pattern will be higher.