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neutral Signal
Broadening Formation
Also called a "megaphone" pattern, this formation is characterized by higher highs and lower lows, creating an expanding range. It signals increasing volatility and market uncertainty.
How to Trade
This is a challenging pattern to trade. Wait for a confirmed breakout above the upper trendline (bullish) or below the lower trendline (bearish). Use tight stop losses due to high volatility.
Market Psychology
Market participants are becoming increasingly uncertain, with wild swings in both directions. This often occurs during periods of high news flow or economic uncertainty.
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Diamond
Technical Diagram
This visual represents the ideal candle formation and breakout points for the Broadening Formation pattern.