Falling Wedge
Two converging downward-sloping trendlines where the upper line falls faster — a bullish pattern indicating downside momentum is fading.
A Falling Wedge has both boundary lines declining, but the upper line steeper — price is being compressed downward with narrowing range. This is a bullish pattern: the contracting selling pressure suggests a coming reversal or continuation higher.
Confirmation: a close above the upper declining trendline. Target = the widest part of the wedge projected upward from the breakout. Volume should contract inside and spike on the break.
- As a reversal pattern, it appears after a downtrend. As a continuation pattern, it forms during a pullback in an uptrend.
Related Terms
Bear Flag
A sharp downward pole followed by a tight, slightly upward-drifting channel — a continuation setup that resolves lower once the flag breaks.
BeginnerBreakout Retest
Price returning to test the former breakout level after the initial break — a resistance-turned-support confirmation and lower-risk entry point.
BeginnerDescending Triangle
A coiling pattern with flat lower support and a declining upper trendline, typically resolving in a bearish breakdown.
BeginnerReversal Pattern
Any pattern that signals a change in the prevailing trend direction — Head and Shoulders, Double Tops/Bottoms, and wedges at extremes are classic examples.
BeginnerRising Wedge
Two converging upward-sloping trendlines where the lower line rises faster — a bearish pattern signalling that upside momentum is exhausting.
IntermediateWedge
Two converging trendlines that both slope in the same direction — the Rising Wedge is bearish, the Falling Wedge is bullish.
BeginnerWolfe Wave
A five-wave price structure where the fifth wave overshoots a channel, signalling a sharp snap-back to the 1-4 trendline.
Advanced