Wednesday, November 16, 2011
A double wedge is simply two wedges that terminate at the same bar. In the chart above, it may be argued that there are two wedges W 6,24,52 and W 34,39,52 or other variant. A double wedge can lead to a large move (b63-b81).
For a double wedge to form, a pullback from a recent swing point (b24) needs to be deep enough that the next leg is likely to need multiple pushes to take out. A strong deep move (b24-33) consisting of CT bars may also demonstrate counter-trend strength that will encourage with-trend traders to exit and counter-trend traders to enter beyond the swing point (above b24).