Two-sided pattern · neutral bias
Broadening Formation (Megaphone) pattern
A broadening formation, also called a megaphone, has swings that get bigger over time: each high is higher and each low is lower. It reflects a volatile, indecisive market.
How to identify a broadening formation (megaphone)
- At least two higher highs and two lower lows.
- Two diverging trendlines.
- Swings that grow in size over time.
What confirms it
A close outside either boundary, or a failure to reach the next boundary, which often hints at the next direction.
What invalidates it
Because the boundaries keep widening, any trade idea needs its own clear invalidation level beyond the latest swing.
How traders project a target
There is no standard measured move. Traders tend to use prior swing levels instead.
Common mistakes
- Trading it like a tight range: the swings are large and the risk is wide.
- Ignoring how unpredictable widening markets are.
- Drawing lines through only one or two swings.
Where it appears
Often appears near major turning points and during periods of news-driven volatility.
Frequently asked questions
Is a megaphone pattern bullish or bearish?
It is neutral and volatile. Many traders treat it as a warning of instability rather than a directional signal.
Why is it called a broadening formation?
Because the distance between the highs and lows broadens as the pattern develops.
Is a broadening formation easy to trade?
It is one of the harder patterns because the swings are large and stops need to be wide.
Related chart patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.