How rising wedge and falling wedge work ?
A rising wedge is a chart pattern that happens when price is moving higher and is trapped between two trend lines that are getting closer and closer together. This pattern happens when the market is in an uptrend and is a sign that the trend is losing steam and could reverse.
A falling wedge is the opposite of a rising wedge and happens when price is moving lower and is trapped between two trend lines that are getting closer and closer together. This pattern happens when the market is in a downtrend and is a sign that the trend is losing steam and could reverse.
Is rising wedge is bearish pattern?
The rising wedge chart pattern is a bearish signal that is created when price action is confined within an upward sloping trendline and a horizontal resistance level. This pattern forms when the market is in a bullish trend and then starts to consolidate. The rising wedge is a bearish reversal pattern and when it forms, it signals that the market is losing steam and that a reversal to the downside is likely to occur.
How to trade with rising wedge pattern?
A rising wedge is formed when the price consolidates between upward sloping support and resistance lines.
If the rising wedge forms after an uptrend, it’s usually a bearish reversal pattern.
On the other hand, if it forms during a downtrend, it could signal a continuation of the down move
Is falling wedge is a bullish pattern?
The falling wedge chart pattern is a bullish signal that is created when price action is confined within a downward sloping trendline and a horizontal support level. This pattern forms when the market is in a bearish trend and then starts to consolidate. The falling wedge is a bullish reversal pattern and when it forms, it signals that the market is losing steam and that a reversal to the upside is likely to occur.
How to trade with falling wedge chart pattern?
Just like the rising wedge, the falling wedge can either be a reversal or continuation signal. As a reversal signal, it is formed at the bottom of a downtrend, indicating that an uptrend would come next.
As a continuation signal, it is formed during an uptrend, implying that the upward price action would resume.
Unlike the rising wedge, the falling wedge is a
bullish chart pattern.
