Broadening formations (megaphones)

5 min 40 XP

The opposite of a triangle

A broadening formation (or megaphone) is a triangle turned inside out: instead of converging, the two lines diverge. Price makes higher highs AND lower lows — each swing wider than the last. It is a picture of volatility spiralling out of control: emotional, news-driven, whipsawing both ways.

Hard to trade — recognise it as a warning

Broadening patterns are exhausting and dangerous to trade inside — the wide swings stop you out in both directions. They often appear near major tops (distribution) or capitulation lows. The safest play is to wait for a decisive close beyond one of the diverging lines, then trade the break with an actively-managed stop. There is no precise target — use the widest height as a rough guide.

Broadening / megaphone = diverging lines (higher highs AND lower lows).
Expanding volatility — chaos, often near a top or capitulation low.
Brutal to trade inside; wait for the decisive break of a line.
No clean measured move — use the widest height and manage actively.

Praxis.

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Level 2: Technical Analysis

M4 · Part 3 — Advanced & rare · Lesson 58/144

Broadening formations (megaphones)

5 min 40 XP

The opposite of a triangle

Hard to trade — recognise it as a warning

Broadening / megaphone = diverging lines (higher highs AND lower lows).
Expanding volatility — chaos, often near a top or capitulation low.
Brutal to trade inside; wait for the decisive break of a line.
No clean measured move — use the widest height and manage actively.