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Hello all,
I regularly have challenges trying to determine whether a wedge is a parabolic wedge (reasonable entry) or a wedge in a strong trend (not a reasonable entry). This is not helped by the fact that both parabolic wedges and strong trends form gaps and potentially have breakouts/climactic behavior, so look very similar. Does anyone have advice for determining how to differentiate between these? One example to conceptualize this is below.
Hi,
really a good question. The only thing I know is:
In parabolic moves, distance between trend and EMA increases.
Hope there are more detailed answers to come to this topic.
I think, in the case of a normal wedge, the local changes are linear and in the case of a parabolic wedge, the local changes are approximately to the power of 2. Like comparing a line graph and a parabola graph.
best regards.
