WedgePattern

Wedge pattern is a chart pattern with two converging trendlines that both slope in the same direction. A rising wedge has both lines sloping upward and is bearish—it typically breaks down. A falling wedge has both lines sloping downward and is bullish—it typically breaks up. Wedges show that momentum is weakening despite the apparent trend direction.

How Wedge Patterns Form

Wedges show weakening momentum:

Rising Wedge (Bearish):

         /\
        /  \ Resistance (rising)
       / /\ \
      / /  \ \
     / /    \ ↓ Breakdown
    / /------\
   / Support (rising, but slower)

Falling Wedge (Bullish):

   \
    \ Support (falling)
     \ /\
      \  \
       \  \ ↑ Breakout
        \  \----
         \ Resistance (falling, but slower)
          \

Quick Reference: Wedge Signals

Pattern	Lines Slope	Bias	Breakout Direction
Rising Wedge	Both up	Bearish	Down
Falling Wedge	Both down	Bullish	Up

Example: Trading Falling Wedge

Falling Wedge Breakout:

Phase	Price	Pattern	Action
Start	$100	Downtrend	Wedge begins
Week 2	$92	Lower high	Resistance line forms
Week 4	$85	Lower low	Support line forms
Week 6	$80	Lines converging	Squeeze tightening
Breakout	$88	Above resistance	BUY signal
Stop	$78	Below wedge low	Risk defined
Target	$103	Wedge height ($23)	Measured move

Rising Wedge (Bearish)

Characteristics

• Both trendlines slope upward
• Higher highs and higher lows
• But range is narrowing
• Volume typically declining

Psychology

Buyers are weakening. Each rally is smaller. Sellers gaining control despite rising prices. Momentum failing.

Trading

Short on breakdown below lower trendline. Stop above recent high. Target is wedge height projected down.

Falling Wedge (Bullish)

Characteristics

• Both trendlines slope downward
• Lower highs and lower lows
• But range is narrowing
• Volume typically declining

Psychology

Sellers are weakening. Each drop is smaller. Buyers absorbing supply. Accumulation happening.

Trading

Buy on breakout above upper trendline. Stop below recent low. Target is wedge height projected up.

Wedge vs Triangle

Feature	Wedge	Triangle
Line direction	Same slope	Opposite or flat
Bias	Counter to slope	Depends on type
Rising lines	Bearish	N/A (ascending is bullish)

Common Mistakes

1. Confusing with triangles – Wedge lines slope same way. Triangle lines don’t.

2. Trading before breakout – Wait for price to break the wedge boundary.

3. Ignoring context – Wedges at end of trends are more reliable.

4. Wrong target – Measure from widest point of wedge for accurate target.

How JournalPlus Tracks Patterns

JournalPlus lets you tag wedge patterns at entry, tracking your success rate with these counter-trend reversal setups.