![]() Out of all the chart patterns that we like to see in a bull market, the falling wedge is definitely one of the top patterns for new traders. It’s an extremely bullish pattern for all instruments in any market in any trend.ĭepending on the educator and educational material you’ve read on chart patterns, wedge patterns may or may not be considered a triangle pattern. Wedges are a variation of a triangle in that it’s shape ultimately creates an apex (which is very, very far away), but wedges trade very differently than standard triangle patterns. Understanding how and why the falling wedge pattern forms are essential to learning how to trade it. While wedges are also triangles, the difference between a wedge pattern and a triangle pattern is the with the trendlines. Symmetrical triangles have an uptrend and downtrend line of near equal slopes.Īn ascending triangle has a flat top with rising bottoms or a rising trendline. ![]() A descending triangle has a flat bottom with lower highs or a declining trendline. Wedge patterns are usually considered to be continuation patterns, meaning. ![]() Wedge patterns have trendlines that both go in the same direction. The trendlines can be either rising (a bullish wedge) or falling (a bearish wedge). On a candlestick chart, a falling wedge is a powerful move lower because there are lower highs and lower lows. You might be wondering, is a falling wedge bearish?Ī falling wedge is a very powerful bullish pattern. In Kirkpatrick and Dalquist’s Technical Analysis, they write that the failure rate for the falling wedge is considerably low.įalling wedges often form at the end of a bear move and generate the confirmation swing higher low.Falling wedges often form after the climax of a violent and fast bearish move.Below are some common conditions that occur in the market that generate a falling wedge pattern. ![]() The failure rate for an upwards breakout is only 8% – 11%. ![]()
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