However, you will need to stay flexible until the formation fully develops. The great thing about the widening wedge pattern is that it can be both bullish and bearish, regardless of the time frame. Is Broadening Wedge Pattern Bullish or Bearish? If you are a more experienced trader, it can help you time your entry and exit points. If you are just starting out, you can use this pattern to help you identify potential reversal trading opportunities. No matter what your level of experience, the expanding wedge can be a valuable tool in your trading arsenal. If you're bearish, you can wait for a downward breakout to occur before taking your short position. If you are bullish on the security, you can go long when there's an upward breakout and the price closes above the upper trendline. However, breakouts can occur in either direction, so you need to be prepared for both scenarios.
The trend is usually sideways within the expanding wedge pattern. The formation is considered complete when the price breaks outside the megaphone shape. It is created by drawing two diverging trend lines that connect a series of price peaks and troughs. The broadening wedge is a bilateral chart pattern that you can use to spot potential breakouts (if the market is trending) and short-term trend reversals.
