One of my favorite chart patterns is the wedge. There are 2 basic types of wedges. And one of them is a Falling Wedge or a Bull Wedge.
FallingWedgeStockCharts.com Definition
The falling wedge is a bullish pattern that begins wide at the top and contracts as prices move lower. This price action forms a cone that slopes down as the reaction highs and reaction lows converge.
The falling wedge can also fit into the continuation category. As a continuation pattern, the falling wedge will still slope down, but the slope will be against the prevailing uptrend. As a reversal pattern, the falling wedge slopes down and with the prevailing trend. Regardless of the type (reversal or continuation), falling wedges are regarded as bullish patterns.
As price action travels down a bull wedge, a high probability bull wedge actually sets up an accumulation. This accumulation setup is why the pattern is said to be … “The falling wedge is a bullish pattern…” The other name “Bull Wedge” describes the outcome. The pop in price expected to occur just before it reaches the apex of the triangle. Generally the candles will travel 2/3rds of the wedge. It should not reach the apex at all. A textbook return of a bull wedge should be to the 2nd touch, approximately 1131.75 in the above example. A wedge is a triangle. The falling wedge is a downward sloping wedge.
What do you mean by “high probabily”? Do you mean Mr. Kewltech that there will be times this will not work? As I suggested, a proper bull wedge is an accumulation pattern. If the market is terribly bearish and the process of accumulation, where the offsetting of the bearish volume fails, so will the bull wedge attempt.
You may see that in a short timeframe you are looking to accumulate within your wedge. However in an adjacent timeframe (ie 5min with 15min adjacent), it is extremely bearish. There is a very good chance that bull wedge will fail. A good signal to note that your wedge is going to fail, your MACD in the higher adjacent timeframe and its higher adjacent timeframe is strongly opposed to the move, like a wide open mouth of an alligator hungry to eat your account capital. Do Not Feed The Animals!!
A great resource to visit for chart patterns, visit The Pattern Site.
It didn’t fail because the Market Makers are personally targeting you. Simply, the accumulation attempt was absorbed by a strong longer term trend. The longer term trend is usually affecting its own distribution process. And your short term wedge cannot, technically, mathematically and logically work against it. The bulls did not step up enough to make the accumulation work. Keep things technical. Do not succumb to funnymentals to explain why the market did what it did. Technical analysis is why you are here. Keep things objective so you will not be a victim of analysis paralysis.
It is in the chart.