Back to Patterns
bullish Signal
Falling Wedge
A falling wedge is a bullish reversal pattern that forms when price makes lower lows and lower highs within a narrowing range. It signals that selling pressure is decreasing.
How to Trade
Enter a long position when price breaks above the upper trendline of the wedge with increased volume. The price target is typically the height of the wedge projected upward.
Market Psychology
Sellers are running out of momentum as each drop becomes shallower. The pattern represents exhaustion of the downtrend, and a breakout signals that buyers have regained control.
Next Lesson
Rounding Bottom
Technical Diagram
This visual represents the ideal candle formation and breakout points for the Falling Wedge pattern.