A widening price formation characterized by lower lows and higher highs, forming a megaphone-like shape. This pattern signifies extreme volatility and growing instability, often occurring after a prolonged downtrend where price swings widen before reversing direction.
✳️ Pattern Formation
- Appears after a sustained downtrend, as selling pressure begins to fade
- Structure forms through expanding price swings, creating a broadening shape
- Indicates accumulation as buyers start entering at higher lows
🔷 Characteristics
- Consists of progressively lower lows and higher highs, forming a megaphone shape
- Support and resistance trendlines diverge, showing increased volatility
- Breakout occurs above the resistance line, indicating bullish momentum
- Volume typically increases sharply on breakout, confirming reversal
🌐 Market Condition
- Effective in high-volatility markets such as equities, indices, and forex pairs
- Best suited for liquid instruments during late-stage downtrends or accumulation
🎯 Trading Strategy
- Enter a long position after breakout above resistance with strong volume.
- Set the stop-loss just below the most recent swing low for protection.
- Calculate the target by adding pattern width to the breakout level.