Rising Wedge / Falling Wedge
Last updated
Last updated
A Rising Wedge can be a warning that an uptrend is running out of gas. Both trendlines slope up, but they converge. A break below the lower line often means sellers are stepping in.
A Falling Wedge is the opposite setup in a downtrend. The lines slope down and converge, and a break above the upper line can signal buyers are kicking in.
Converging Lines. Price swings get tighter, forming wedge-shaped support and resistance.
Slope Direction. Rising Wedge lines both point up; Falling Wedge lines both point down.
Lower Volume or Momentum. Sometimes volume tapers as price nears the wedge apex.
Entry. For a Rising Wedge, look for a crack below the lower trendline. For a Falling Wedge, watch for a push above the upper trendline.
Stops. Many place stops just inside the wedge in case price snaps back.
Targets. A typical approach is to measure the wedge’s widest part and project that move from the breakout point.
Always confirm the breakout with a solid close. Fake breaks can happen.
Watch volume shifts. If volume jumps on the break, it adds confidence.
Check bigger support or resistance levels beyond the wedge to see where price may stall.
Review past charts and find at least two Rising Wedges and two Falling Wedges. Mark the converging lines. Pretend to enter once price closes beyond the wedge.
Place your stop inside the wedge, and plan a target using the widest part of the pattern. Advance the chart to see how the trade might have played out. Keep track of your wins and losses to understand how wedges behave in different markets.
