FALLING WEDGE IN UPTREND HOW TO

And if the price action drops below the support of a rising wedge pattern in a downtrend, you have a bearish continuation. A bearish reversal occurs when the price breaks below the support of a rising wedge pattern in an uptrend. Ideally, you can trade a rising wedge pattern by shorting when the price breaks below the support line. Typically, this slowing momentum is often accompanied by a drop in the volume traded. The rationale behind this pattern is that although the price action is trending upwards, it is contracting, indicating that the upward momentum is waning. Ideally, the formation of a rising wedge chart pattern precedes a bearish breakout.

FALLING WEDGE IN UPTREND HOW TO

How to Trade a Rising Wedge Chart Pattern In this case, the support trendline is usually steeper than the resistance. The rising wedge pattern is a bearish chart pattern formed when the price is constrained within two upward-sloping and converging trendlines. Secondly, the volume traded is generally low within the wedges and thirdly, there’s always a breakout from either of the trendlines. Firstly, the price action has converging upper and lower trendlines. Both rising and falling wedge chart patterns have three common characteristics. Wedges can be continuation or reversal chart patterns depending on how they are formed on a chart. These converging lines represent rising support and rising resistance. Rising and falling wedge chart patterns form when an asset’s price consolidates between two converging trendlines. Wedges usually form when an asset’s price consolidates after a sustained bullish or bearish trend.

What are Wedge Chart Patterns?Ī wedge is a chart pattern formed by converging two trendlines. And this is what the rising and falling wedge chart pattern trading is geared towards. When timed accurately, breakout trading strategies can be invaluable for catching trends while they’re just beginning. Any price action has a series of steady bullish and bearish trends punctuated by momentary price consolidation.

Falling wedge in uptrend