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 ✍️
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