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What is a wedge pattern?

Wedge patterns are usually characterized by converging trend lines over 10 to 50 trading periods. The patterns may be considered rising or falling wedges depending on their direction. These patterns have an unusually good track record for forecasting price reversals. A wedge pattern can signal either bullish or bearish price reversals.

What is a falling & rising wedge pattern?

Falling & Rising Wedge A wedge pattern is a triangular continuation pattern that forms in all assets such as currencies, commodities, and stocks. Unlike other candlestick patterns, the wedge forms within a longer period of time, between hours and days. There are two types of wedge patterns, which include falling and rising wedge.

Is a falling wedge a continuation or a reversal pattern?

A falling wedge is a continuation pattern if it appears in an uptrend and is a reversal pattern when it appears in a downtrend. Link lower highs and lower lows using a trend line. The two lines will slope downwards and converge Below are various ways to trade the falling wedge using technical analysis:

What does a falling wedge mean on a chart?

Like rising wedges, the falling wedge can be one of the most difficult chart patterns to accurately recognize and trade. When lower highs and lower lows form, as in a falling wedge, the security is trending lower. The falling wedge indicates a decrease in downside momentum and alerts investors and traders to a potential trend reversal.

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