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[Solved] Wedge Failure
Good Morning Everyone
I am struggling a lot to understand the difference between a successful Wedge and a failed Wedge.
In this particular case, it is a failed wedge and a failed wedge top. But I failed to recognize it on time.
It will be a great help if anyone of you could explain this topic.
I dont think the wedge failed. It had 3 pushes with more or less the same distance in between, and broke out to the downside. It only reverses and goes the otherway.
Maybe you can better see it as a FBO which reverses in about 5 bars.
You Mean Double Top BO failed and then Failure failed, which led to a larger BO.
I think anything can if there is some news, perhaps that's what may have happened in this case
I mean after the third push the wedge broke out to the downside. This BO reversed ( FBO ) and did go the other direction, Which make a HH wedge top. But in this case its better to look for a LL wedge top since the trend is too tight.
It is not the wedge failure, In my opinion it is failed MTR attempt
If you look at closely, following things are happening
1. in your leg 2 and leg 3, bears were strong enough to fill the gap of last HH with low of leg
2. after 3rd push up, bear were strong to create moving average gap bar & created LL
So they were trying for MTR attempt which failed
How it failed
after strong leg (LL & MAG) down, bull tried to go up (I see this test of breakout of bull trend line)
and they were able to fail the attempt of bears and successfully created a breakout
(If you have gone though MTR videos, Al specifically said there is only 40% of chance (in MTR) of getting swing down (in case of bear breakout))
Further to add
if you see after MAG, bull were very strong that they were able to create more than 5 bar. Bull bars are expending as well, closing near their highs. The more the bull bars, the more probability favors the bulls in this case
If bear would have been strong after the breakout of trend line and creating LL, trend resumption attempt by bull should have been limited to around 5-6 bars, every high of those bar should have been sold by bear creating tail on top and bear should have attempted sell of near MA
but bear did noting of this sort, it should there is no serious sell off on the part of bears
If i would have taken this sell off, I would have exited after 3rd of 4th bull bar attempting trend resumption for above reasons in last two paras
Hope this clarifies the position
Bulls are strong
1. More bull bars, just one bear bar in trend resumption attempt
2. 50% pull back resistance failed
3. high of 3rd leg broke..successful BO by bulls creating new HH
4. bear tried once more and see the moment they reached MA, bulls bought again. Bulls didn't give any chance to bears to go even below MA
Refer video 24D...slide 22...
Failed Bear BO on wedge top.... (In case your opinion is centered around looking this as wedge)
25% of probability that it will have bull breakout
I saw this from point of view of MTR
If you are looking from Wedge point of view
In such case you should look at
1. Not the line in your SS but look the last bear leg (below the arrow line)
2. This is Wedge bull flag(because of bull trend). Wedge bull flag is bear channel (2nd push down is undershoot)
3. In case of bear channel- 75% of the time you get bull BO and 25% of the time you get bear BO
So in this case the there is 75% chance of bull breakout, if you trade it like a wedge
So now you have two Points- Trading like failed MTR or trading like wedge...in both case it is clear that it favors the bull beyond doubt so sell positions are only for scalp and not for swing