![]() First, the price of an asset needs to be in a strong upward trend.Īs the price rises, it reaches a point where bulls start raising doubts about how high it can go. In the same way, a rising wedge usually leads to a bearish breakout How a falling wedge happensĪ falling wedge happens when several things happen. For starters, divergence happens when an asset’s price is rising while oscillators like the Relative Strength Index (RSI) and the MACD are falling.Ī bullish divergence pattern, on the other hand, happens when an asset’s price is falling while oscillators are falling. ![]() ![]() Wedges are closely related with divergences. Related » Triangle Pattern in Day Trading Wedge patterns and divergences The chart below shows how a falling wedge looks like. The two wedges are usually seen as bullish and bearish, respectively. There are two types of wedge patterns, which include falling and rising wedge.Ī falling wedge is simply defined as a continuation pattern that is formed when a price fluctuates between two downward sloping and converging trendlines.Ī rising wedge, on the other hand, is a bullish chart that happens when the fluctuates between two upward sloping and converging trend lines. Unlike other candlestick patterns, the wedge forms within a longer period of time, between hours and days. What is a wedge pattern? Falling & Rising WedgeĪ wedge pattern is a triangular continuation pattern that forms in all assets such as currencies, commodities, and stocks. How traders can use the rising wedge pattern.What is a wedge pattern? Falling & Rising Wedge.
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