![]() Wedge with downside slant is called falling wedge 2. Wedge with an upside slant is called a rising wedge b. Learn more about wedge patterns like the rising wedge pattern. Wedge patterns have converging trend lines that come to an apex with a distinguishable upside or downside slant. Once the upper trend line was broken to the upside, the stock moved higher with ease.įalling wedge patterns are reliable signals we like to trade from, so we point them out to members of our stock pick service whenever they’re found on the charts. This stock formed a falling wedge pattern during its downtrend which led to an upside reversal and a very reliable trading low. When a falling wedge is a reversal pattern, the widest portion of the wedge may be added to the breakout level to determine the upside move which follows. Volume expansion which accompanies a breakout from a falling wedge adds to the reliability of this chart pattern.īreakout Expectation: In the case of a continuation falling wedge, the widest portion of the wedge may be measured and added to the breakout level to determine the upside move which follows. The early portion of the wedge has a wider price range, while the latter stages of a falling wedge are characterized by tighter price action. This may be seen by drawing two trend lines, a steeper trend line connecting minor highs, and a shallow trend line connecting minor lows. So you can simply start writing your conditions Price and then pick the comparison you want. Once you draw your chart patterns via trendlines, the trendlines will have an auto-generated name that you’ll need to use in the entry or exit conditions. The example shown on this page is a falling wedge reversal pattern found at the end of a downtrend.Īppearance: The falling wedge pattern is a contracting trading range with a downward tilt. cleo.finance trading chart Falling Wedge Pattern. When found within the context of an uptrend, the falling wedge is similar to a bull pennant and is a continuation pattern. In both cases, falling wedge patterns are generally resolved to the upside.Ĭontext: Found within a downtrend, the falling wedge is often a reversal pattern. ![]() Falling wedge patterns can be found in both uptrends and downtrends, but taking notice of the prevailing trend will help you determine whether the falling wedge signals a continuation pattern or a reversal pattern.
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