Falling Wedge: The Bullish Pattern Most Traders Miss
A falling wedge is a bullish pattern that forms when price action contracts between two downward-sloping lines. Both highs and lows are getting lower, but the lower trendline declines more slowly. This shows that sellers are losing momentum.
There are two types of falling wedges:
🟢In an uptrend, it acts as a continuation pattern. The price pauses and consolidates before breaking out upward again.
🔴In a downtrend, it acts as a reversal pattern, often signaling a bottom before a trend change.
Both versions look similar on the chart — a narrowing wedge sloping down. The breakout usually happens to the upside. To trade it 👇
1️⃣Wait for a confirmed breakout above the upper resistance line.
2️⃣Look for strong volume on the breakout to confirm the move.
3️⃣You can enter on the breakout or wait for a retest of the trendline.
4️⃣Place your stop below the recent low.
5️⃣Set a target based on the height of the wedge.
Falling wedges work best in strong trends and become more reliable the longer they form ✍️
#FAQ
A falling wedge is a bullish pattern that forms when price action contracts between two downward-sloping lines. Both highs and lows are getting lower, but the lower trendline declines more slowly. This shows that sellers are losing momentum.
There are two types of falling wedges:
🟢In an uptrend, it acts as a continuation pattern. The price pauses and consolidates before breaking out upward again.
🔴In a downtrend, it acts as a reversal pattern, often signaling a bottom before a trend change.
Both versions look similar on the chart — a narrowing wedge sloping down. The breakout usually happens to the upside. To trade it 👇
1️⃣Wait for a confirmed breakout above the upper resistance line.
2️⃣Look for strong volume on the breakout to confirm the move.
3️⃣You can enter on the breakout or wait for a retest of the trendline.
4️⃣Place your stop below the recent low.
5️⃣Set a target based on the height of the wedge.
Falling wedges work best in strong trends and become more reliable the longer they form ✍️
#FAQ
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.