Falling Wedge Pattern

What the Falling Wedge pattern means

Price keeps grinding lower, but the narrowing range and slowing lows show sellers are running out of strength even as the chart still points down. That fading momentum makes an upside break the more common outcome, especially after an extended decline.

How the Falling Wedge is traded

• →Wait for a close above the upper trend line before entering long.
• →The target is often a move back toward where the wedge began.
• →Stop goes below the most recent low inside the wedge.
• →More reliable after a long downtrend or as a reversal at support.

Common mistakes

• ✕Staying short because price is still making lower lows inside the wedge.
• ✕Buying before the upper line breaks.