However, rising wedges can occasionally form in the middle of a strong bearish trend, in which case they are running counter to the main price movement. This means that in contrast to ascending triangles, both subsequent lows and subsequent highs within the wedge pattern will be rising as the trading range narrows towards the apex of the wedge.Īs bearish signals, rising wedges typically form at the end of a strong bullish trend and indicate a coming reversal. Rising wedges are bearish signals that develop when a trading range narrows over time but features a definitive slope upward. Wedge patterns can be difficult to recognize and trade effectively since they often look much like background trading activity on charts.
However, unlike symmetrical triangles, wedge patterns are reversal signals and have a strong bias towards being either bullish – for falling wedges – or bearish – for rising wedges. Wedge patterns are chart patterns similar to symmetrical triangle patterns in that they feature trading that initially takes place over a wide price range and then narrows in range as trading continues.
