Broadening Formation
Expanding price swings with higher highs and lower lows, forming a megaphone shape — signals increasing volatility and often precedes a sharp reversal.
A Broadening Formation (Megaphone) is the opposite of a triangle: trendlines diverge as price makes progressively higher highs and lower lows. Volatility is expanding, not contracting.
The pattern typically signals distribution at a top or accumulation at a bottom. Sells are triggered on a break below the lower expanding trendline; buys on a break above the upper line. The pattern is difficult to trade inside — trades are taken only at confirmed line breaks.
Related Terms
Diamond Pattern
A broadening formation that then contracts into a symmetrical triangle, creating a diamond shape — a rare but reliable reversal pattern.
AdvancedIsland Reversal
A price cluster isolated by two gaps on either side — a sharp reversal signal where the gap-up and gap-down create a gap island.
IntermediateReversal Pattern
Any pattern that signals a change in the prevailing trend direction — Head and Shoulders, Double Tops/Bottoms, and wedges at extremes are classic examples.
BeginnerSymmetrical Triangle
Converging trendlines with lower highs and higher lows, signalling a coil of indecision that typically breaks in the direction of the prior trend.
Beginner