Rising and Falling Wedges

Part of Art of Chart Reading

Rising and falling wedges are chart patterns leading to violent breakouts. Most of the time, the breakout direction is opposite to the direction of the wedge. Hence, they are often named as reversal patterns although that is not necessary true.

Rising wedges are also known as upside wedge or rising triangle. The breakout direction is often to the downside. Many people simply refer to the pattern as a top formation.

Falling wedges are also called downside wedge or falling/dropping triangle. The breakout direction is likely to the upside. Most people regard the pattern as a bottom formation.

An Example Of Falling Wedge

Following is an 4 hour chart of Euro Dollar with a falling wedge.

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