Wedges: Rising and Falling- Another of the binary options
Wedges: rising and falling are the unique patterns that denote the reversal of the trend, when there is a change in direction from the trend that is contained within the pattern itself.
When the price stays between the two converging trend lines that slope either in the same up or down direction, wedges: rising and falling patterns are formed. When a wedge is formed the upper trend line is the resistance and the lower trend line acts as a support.
When the wedge: rising and falling are formed then the binary options used by the traders should ideally prepare trades which would allow them to gain from a move in the opposite direction of the trend, within the wedge. This is the Binary options strategy that most investors follow.
Wedges: rising forms – one of the vital binary options, when there are internal up trends. The lines of support and resistance could be drawn around a rising wedge that would be slanted in the direction of increasing price.
When the two lines converge price would break out of the wedge to the down side, thus enabling the binary option traders to put their money into Put style options the moment they see a Wedge: Rising pattern, so that the price would fall to be in-the-money. Wedges: Falling are quite naturally the opposite of rising wedges, and they form when there are internal down trends. The lines of support and resistance could be drawn bordering the price in a falling wedge slanted in the downward direction and the moment they converge – the price would break out fo the pattern to the upside.
If the traders following binary options strategy see a falling wedge pattern in progress, they should position themselves with Call-style buying options which would make the price rise to be in-the-money. Wedges: Rising and Falling should not be mistaken for triangles.
Though the triangles and wedges look quite similar but triangles are the pattern which is a continuation which indicates a break out move in the same direction as the previous trend. A wedge on the other hand is an indicator of a reversal of the present trend. These are the different binary options available with the traders. Wedges: Rising and Falling are the most frequently encountered patterns, to formulate binary options strategy.