Wedge Pattern
A wedge is a converging pattern of lower highs and lower lows (falling) or higher highs and higher lows (rising), breaking with trend or against it.
A wedge is a converging pattern of trendlines that compresses price before a breakout. Falling wedges tend to break up, rising wedges down, and the breakout confirms it.
A wedge is a chart pattern where two converging trendlines trap price: a falling wedge slopes down with lower highs and lower lows, a rising wedge slopes up with higher highs and higher lows. Falling wedges inside a broader uptrend usually resolve upward; rising wedges inside a downtrend usually resolve downward, though wedges can also act as reversal patterns at extremes. The breakout direction confirms the pattern; until then price is compressing inside the wedge.
How It Works
- Falling wedge: lower highs and lower lows converging downward
- Rising wedge: higher highs and higher lows converging upward
- Breakout direction decides the trade
Trading Tips
Trade the breakout of the wedge trendline, ideally with volume
Wedge targets are often the height of the pattern projected from the breakout
Wedges at market extremes can mark reversals - check the context
Related Terms
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