WEBVTT 00:02.840 --> 00:10.290 In this video we're going to take a look and wedgies and triangles and now wedges and triangles. 00:10.410 --> 00:14.530 Kind of a barren topic but they all basically mean the same thing. 00:14.730 --> 00:23.220 And what this means is that buyers and sellers are getting compressed and that we're meeting at a point. 00:23.460 --> 00:26.640 And there are a multitude of different types of both. 00:26.640 --> 00:34.140 There are at least five major ones so for triangles what you'll have is you'll have price compressing 00:36.020 --> 00:42.320 bouncing around in two trend lines that are competing. 00:42.390 --> 00:55.060 This is a symmetrical triangle and it is like all triangles a constriction of price constriction of 00:55.060 --> 00:58.060 energy and needs to be broken. 00:58.270 --> 01:01.600 By the time you hit the 80 percent of the way to the apex. 01:01.600 --> 01:08.230 So as we start this pattern you draw two trend lines and if you get past this 80 percent Apex then it 01:08.230 --> 01:15.540 loses its inertia and just kind of peters out it was big the nice thing about triangles and this is 01:15.540 --> 01:23.400 going to be true with all of them don't matter which flavor one hundred is let's say how many points 01:23.460 --> 01:26.710 or ticks or pips or whatever that this triangle makes. 01:26.790 --> 01:32.730 Once you break out of this in either direction you measure one hundred points from that trend line break 01:33.860 --> 01:35.920 for your target. 01:35.970 --> 01:40.320 There are also two other types of triangles that are quite common. 01:40.320 --> 01:46.530 There is the ascending and this simply means the price is gradually going higher. 01:46.560 --> 01:52.380 It's running into significant resistance at say 900 here at a specific level. 01:52.380 --> 01:58.920 And this suggests that we are going to break out to the upside because the buyers are becoming more 01:58.920 --> 02:08.230 and more aggressive soon as we close above this trend and this sideways resistance line we start to 02:08.230 --> 02:09.380 measure. 02:09.610 --> 02:10.810 Same thing over here. 02:11.230 --> 02:17.950 If it is 100 points or 100 pips or whatever we're looking at a gain of one hundred from the breakout 02:19.190 --> 02:27.860 there's also the descending triangle which is just simply sellers becoming more aggressive and then 02:27.860 --> 02:31.870 finally they break through a resistance once they break through a resistance. 02:31.880 --> 02:35.390 You're looking at a loss of whatever the measurement is. 02:35.390 --> 02:41.380 Now remember again we want to see this happen before 80 percent to the apex. 02:41.480 --> 02:51.820 The point where these two lines intersect so in this case you can clearly see that there is an uptrend 02:51.820 --> 03:02.340 line being formed there and there's resistance here on Amazon and you can see that this 80 dollar hike 03:02.370 --> 03:11.330 right here was in fact hit pretty classic ascending triangle here and Citigroup. 03:11.330 --> 03:16.690 We had a descending triangle as shown by the trend line here and the gap you have to keep. 03:16.760 --> 03:22.250 In this case this is a little bit special case because a gap should be thought of as a big green candle. 03:22.250 --> 03:25.870 You see we came down with balance a couple times and then eventually broke down. 03:25.880 --> 03:28.760 You can also see clearly that we hit our target. 03:28.760 --> 03:30.550 So again think about what's happening here. 03:30.560 --> 03:33.430 The sellers are overwhelming the buyers. 03:33.590 --> 03:40.550 The buyers finally give way and they have to close their positions which just speeds up the process 03:40.610 --> 03:50.230 going forward allowing for a fulfillment sometimes much quicker than you potentially think can happen. 03:50.240 --> 04:00.800 And finally we have the symmetric triangle symmetrical triangle as you can see on deer here on the weekly 04:00.800 --> 04:03.650 chart there's a trend line there and there's a trend line there. 04:03.710 --> 04:08.270 We break out above there we're looking for. 04:08.270 --> 04:14.230 Well you know let's just call it thirteen dollars so thirteen dollars from the break out of eight eighty 04:14.270 --> 04:20.900 I should say is ninety three and you see we did in fact fulfill that target you'll see this time and 04:20.900 --> 04:28.130 time again triangles are by far probably one of the most commonly traded patterns. 04:28.130 --> 04:35.540 Now I also mentioned wedges and wenches are very much like triangles there's only two that we'll focus 04:35.540 --> 04:45.030 on here there is the rising and the descending wedge and what's happening here is that we are getting 04:45.030 --> 04:47.630 buying pressure but it's starting to tighten up like a spring. 04:47.640 --> 04:51.040 It's got a little bit of a tilt to it. 04:51.060 --> 04:56.850 That being said when you break the down line are the uptrend line you break down through it then you 04:56.850 --> 05:00.840 start looking for the bottom of the pattern because these people who had been buying are running into 05:00.930 --> 05:03.800 overhead resistance and finally capitulation. 05:03.810 --> 05:05.310 Same thing with a falling wedge. 05:05.310 --> 05:10.200 You know we're we're falling in the market and then all of a sudden for whatever reason the sellers 05:10.200 --> 05:13.980 run out of momentum we started aiming for the top of this pattern. 05:14.000 --> 05:16.680 These are relatively common patterns. 05:17.030 --> 05:24.310 They aren't as common or as highly traded as triangles but they are worth paying attention to so here 05:24.310 --> 05:29.100 in John Deere we have a little bit of a rising wind here. 05:29.110 --> 05:34.720 You can see that there was certainly upward pressure here on this trend line and you can definitely 05:34.720 --> 05:39.340 see that there was a bit of resistance here at this trend line. 05:39.520 --> 05:40.540 And look what happened. 05:40.540 --> 05:47.050 We ended up breaking through it on this candle pretty pretty quietly it wasn't as eventful of a move 05:47.050 --> 05:54.400 that you would think then we dress or lower and then gapped down to hit this figure here and here we 05:54.400 --> 06:01.840 have a falling wedge in Goldman Sachs but you can see there's a little bit of a trend line there. 06:03.050 --> 06:05.890 And there's trend line there. 06:05.900 --> 06:08.210 Well we break through it. 06:08.270 --> 06:14.930 Not only do we hit this target but we gap into it and continue to go much higher so these are relatively 06:14.930 --> 06:15.860 common patterns. 06:15.860 --> 06:20.780 I would say of course triangles are probably more reliable than where just just because they're easier 06:20.780 --> 06:26.420 to spot wedges tend to be a little convoluted at times and sometimes you have to use a little bit of 06:26.420 --> 06:28.320 artistic license. 06:28.550 --> 06:30.980 They are tradable though they are very tradable event.