Broadening Right Angle (Right Angle) The shape is similar to the Triangle model but rotates in the opposite direction. This pattern may be a continuation pattern, or it may be a reversal. If you have the right trading strategies, you can take advantage of them. There are two types of Broadening Right Angle models: Right Angled Broadening & Ascending and Right Angled Broadening & Descending. We will in turn learn the following.
Right Angled Broadening & Ascending model
What is Right Angled Broadening & Ascending?
Right Angled Broadening & Ascending is created when the price range is expanded to the right. This pattern is attached to a horizontal support line below and a resistance line which slopes upwards.
If you already know the triangle model, you can see Right Angled Broadening & Ascending is a reverse triangle.
Features of Right Angled Broadening & Ascending
The Right Angled Broadening & Ascending model is made up of the following characteristics:
- The previous trend is usually an uptrend, but it can sometimes be a downtrend. In general, the trend ahead is not important.
- The price has a horizontal support line and the resistance line is inclined upwards.
- Initially the price went in a narrow range, then widened the range but still within the 2 support / resistance lines.
Right Angled Broadening & Ascending can be both a continuation and a reversal pattern, depending on whether the market will break above resistance or support.
Trading guide with Right Angled Broadening & Ascending model
According to statistics, the Right Angled Broadening & Ascending model usually ends with the price reversing down instead of going up. You can make a trade using the 3 methods below
Method 1: Break out strategy
If price breaks below the support line: We consider the sell order. A stop loss is placed above the support and profit-taking threshold equal to 50% of the model's height.
Normally, the price often goes back to the support level, so we need to wait for a pullback to enter the order.
If price breaks above resistance level: We consider buying. A stop loss is placed below the breakout point and profit-taking threshold is equal to the height of the pattern.
Method 2: Buy when touching support
As soon as the price touches the 3rd support line, enter the buy order. In that case, the stop loss will be at the bottom of the nearest bottom and the profit-taking point will be on the resistance line on the opposite side. This method has the advantage of a relatively short stop loss while taking profit is quite large, giving a high risk / reward ratio. However, we call this a risky approach because as mentioned above, the pattern often ends with a bearish action, breaking down the support level.
Method 3: Sell when hitting resistance
When the price hits the upper resistance line for the third time, enter the sell order. A stop loss is placed above the highest peak and the profit-taking point is located on the support line on the opposite side below. This method has the advantage that the probability that prices will drop is quite high in this model.
Actual example of the Right Angled Broadening & Ascending model
Below is an example of the Right Angled Broadening & Ascending model. Both appearances, Right Angled Broadening & Ascending ended with a break in which the first price dropped further, the second time the price fell only about half the height of the model.
Right Angled Broadening & Descending model
What is Right Angled Broadening & Descending?
Right Angled Broadening & Descending is created when the price range is expanded to the right. This pattern is attached to a horizontal resistance line above and a support line sloping down.
If you already know the triangle model, you can see Right Angled Broadening & Descending is a reverse triangle.
Features of Right Angled Broadening & Descending
The Right Angled Broadening & Descending model is made up of the following characteristics:
- The previous trend is usually a downtrend, but it can sometimes be an uptrend. In general, the trend ahead is not important.
- The price has a horizontal resistance line and the support line is inclined downwards.
- Initially the price moved in a narrow range, then widened the range but still within the 2 resistance / support lines.
Right Angled Broadening & Descending can be both a continuation and a reversal pattern, depending on whether the market will break down a resistance line or break a resistance line.
Trading guide with Right Angled Broadening & Descending model
Statistically, the Right Angled Broadening & Descending model usually ends with the price reversing going up instead of going down. You can make a trade using the 3 methods below
Method 1: Break out strategy
If price breaks above resistance level: We consider buying. The stop loss is placed below the resistance level and the profit-taking threshold will equal 50% of the model's height.
Normally, the price often goes back to testing resistance so we need to wait for a pullback to enter the order.
If price breaks below the support line: We consider the sell order. A stop is placed above the breakout and the profit-taking threshold is equal to the height of the pattern.
Method 2: Sell when hitting resistance
As soon as the price hits the third resistance line, enter the sell order. In that case, the stop loss will be right on the nearest bottom and the profit-taking point will be below the support line on the opposite side below. This method has the advantage of a relatively short stop loss while taking profit is quite large, giving a high risk / reward ratio. However, we call this a risky approach because as mentioned below, the pattern often ends with an upward movement, breaking out of resistance.
Method 3: Buy when touching support
When the price touches the support line below the 3rd, enter the buy order. The stop loss is placed below the highest peak and the profit-taking point is located at the resistance line on the opposite side above. This method has the advantage that the probability that the price will increase is quite high in this model.
Actual example of the Right Angled Broadening & Descending model
Below is an example of the Right Angled Broadening & Descending model. After a few bounces between support and resistance, the price finally broke above the horizontal support line and then moved up.
summary
We have just introduced you to two types of the Right-Angle Expanded model. To achieve high efficiency, you should use a combination of other technical indicators and always remember to set the complete stop loss and take profit. Good luck!
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Author: Tin Nguyen
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