Chart pattern
Falling Wedge explained
A falling wedge has two downward-sloping lines that converge, with the upper line steeper. Price keeps falling but the range narrows, which can signal fading selling pressure and often resolves upward, but not always.
How to spot it
- Find two falling trendlines, one through the highs and one through the lows.
- Check that the lines converge, with the upper line falling faster.
- Watch for diminishing downside momentum as the wedge tightens.
- Look for a close above the upper trendline.
What invalidates it
The pattern is invalidated if price closes below the lower trendline with momentum, or if a break above fails and returns inside.
Common mistakes
- Buying every small drop into a falling channel
- Entering before the upper trendline breaks
- Drawing lines through only two touches
- Ignoring higher-timeframe resistance above the wedge
Questions
- Is a falling wedge bullish?
- It leans bullish, because the narrowing range shows sellers losing momentum. It can also break downward, so wait for a close.
- How is it different from a falling channel?
- A channel has parallel lines. A wedge has converging lines, which is what signals compression.
- What is a sensible target?
- Many traders use the wedge's widest part, projected from the break, or the nearest resistance. Treat it as a reference only.
Related patterns
See how patterns are applied to a specific instrument in the market guides.
Educational content, not financial advice. Chart patterns describe what price has done and do not predict what it will do next.
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