Falling Wedge: The Bullish Pattern Most Traders Miss

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