![]() The rising and falling wedges help us in predicting the reversals of the trends that help the traders in making appropriate trading decisions. The profit target is set by measuring the height of the back of the wedge and extending that distance up from the trend line breakout. The stop loss is usually placed below the back of the wedge. In order to form a descending wedge, both the support and resistance lines have to point downwards and the resistance line should be steeper than the line of support.īelow is an example of Falling Wedge formed in daily chart of BSE Sensex:īelow is an example of Rising Wedge formed in weekly chart of Sundaram Finance ltd.: ![]() The falling wedge chart pattern formed when a market consolidates between two converging trend lines i.e. In order to form a rising wedge, both the support and resistance lines have to point upwards and the support line should be steeper than resistance. The rising wedge chart pattern is formed when a market consolidates between two converging trend lines i.e. Once there is price breakout, there is a sharp movement of prices in either of the directions. This pattern can be drawn by using trend lines and connecting the peaks and the troughs. Rising wedge occurs when the price of the stock is rising over a time whereas falling wedge occurs when the price of the stock is falling over a time. The price action forms a cone that slopes down or up as the reaction highs and reaction lows converge. Descending Triangle - This pattern is usually a continuation pattern. Just monitor on the declining of the volume until the breakout volume spike. It can be in the form of a rising wedge or a falling wedge. Hi All, This is just a initial stage of the pattern, the pattern usually change to ascending/descending triangle and sometime to raising/ falling wedge or a channel. Wedges are bullish and bearish reversal as well as continuation patterns which are formed by joining two trend lines which converge. Next, we will learn a completely different type of chart pattern called Wedges. ![]()
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