Falling Wedge Pattern
The falling wedge is typically a bullish pattern where price makes lower highs and lower lows, but the slope of the lows is steeper than the slope of the highs. This shows selling momentum weakening.
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Download ChartedKey Characteristics
Trading Tips
- ✓Wait for breakout above upper trendline
- ✓Volume should increase on breakout
- ✓Set stop-loss below recent swing low
- ✓Pattern is bullish regardless of prior trend
Signal Strength & Reliability
Falling wedges are bullish about 65-70% of the time. They show that despite making lower lows, selling momentum is waning. The pattern is reliable both as a reversal in downtrends and continuation in uptrends.
Falling Wedge FAQs
Common questions about the falling wedge pattern
Falling wedges are typically bullish patterns about 65-70% of the time. The converging trendlines with weakening selling momentum usually lead to an upward break. Always wait for the actual breakout before entering.
In a descending triangle, the lower line is horizontal (flat support). In a falling wedge, both lines slope downward with converging angles. Descending triangles are typically bearish; falling wedges are typically bullish.
The best entry is on the breakout above the upper trendline with volume confirmation. Conservative traders wait for a retest of the broken trendline as support. Aggressive traders may enter on bullish divergence inside the wedge.
Related Patterns
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Disclaimer: Charted provides technical analysis for educational purposes only. This is not financial advice. All trading involves risk. Always consult a licensed financial professional before making investment decisions.
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