Falling Wedge
BullishReversalIntermediatePrice keeps falling, but every drop is smaller. Sellers are running dry.
Verdict: UseBitcoin 4H: 9 trades, won 56%, avg trade +0.9% vs random day +0.7% (too few trades to judge). Backtest
Lower highs, lower lows. Price keeps sliding, and it looks bearish.
step 1/6
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | A candle CLOSE above the upper trendline (through the first and third highs). |
| Cancelled if | Price trades below the last low before the breakout. |
| Target | Widest part, projected from the breakout |
3 common mistakes
- Buying inside the wedge while the downtrend is still intact.
- Mixing it up with a falling channel, where the lines are parallel, not converging.
- Drawing the lines through only two touches each; you want three swings on each side.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 9 | 56% | +0.94% | +0.71% |
| US large caps (50) · 1D · 2016-2026 | 54 | 57% | +2.49% | +1.64% |
Verdict: UseMade money and beat a random entry on US large caps. Bitcoin had too few signals to judge.
pattern +134%random +89%