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As technical analysts, it is our goal to form a view regarding whether a particular share is going up, going down, or moving in a sideways band. Even though there are only three directions in which a share can move, it is sometimes a tricky task to see exactly what a share is doing. Simplicity is essential. When first looking at a chart, get to the grass roots level and have a good look at a share’s price action. You can use a bar chart, a line chart or a candlestick chart. The markets are made up of people’s emotions towards shares. If they predominantly feel fear that they will lose their capital or profits, then the share price will ultimately decrease. If the participants mainly feel greed or hope, the share price will go up. A chart will show this interplay of emotion in a graphic format. A single Western bar The individual building block of a bar chart is a single bar. Drawing a single bar requires an opening price, a high, a low and a closing price.The vertical li...

Of all the reversal patterns we can use in the Forex market, the rising and falling wedge patterns are two of my favorite. They can offer massive profits along with precise entries for the trader who uses patience to their advantage. One of the great things about this type of wedge pattern is that it typically carves out levels that are easy to identify. This makes our job as price action traders that much easier not to mention profitable. Characteristics of a Wedge The rising and falling wedge patterns are similar in nature to that of the pattern that we use with our breakout strategy. However because these wedges are directional and thus carry a bullish or bearish connotation, I figured them worthy of their own lesson. The first thing to know about these wedges is that they often hint at a reversal in the market. Just like other wedge patterns they are formed by a period of consolidation where the bulls and bears jockey for posi...