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bearish Signal
Rising Wedge
A rising wedge is a bearish reversal pattern that forms when price makes higher highs and higher lows, but the range narrows over time. It typically appears at the end of an uptrend.
How to Trade
Enter a short position when price breaks below the lower trendline of the wedge. Set a stop loss above the most recent high within the wedge. The target is often the height of the wedge projected downward.
Market Psychology
Buyers are gradually losing steam as each rally produces smaller gains. The narrowing range indicates weakening momentum, and when support breaks, trapped longs rush to exit.
Next Lesson
Falling Wedge
Technical Diagram
This visual represents the ideal candle formation and breakout points for the Rising Wedge pattern.