Falling wedge and rising wedge chart patterns
A wedge is two converging lines that slope the same way. Learn the falling wedge and the rising wedge, how they differ from triangles, and name two on a chart.
A wedge forms when price moves between two lines that slope the same way and close in. In a falling wedge both lines fall, the upper one faster. In a rising wedge both rise, the lower one faster (on this site: the gap narrows to 75% of its starting width or less, and each line moves more than 1%).
Practice on two charts
How to identify it (the exact rules)
These are the rules this site uses to build and grade every chart. Traders do not all use the same numbers; ours are published so you can check every answer (see the methodology).
- Swing high: a candle whose high is above the highs of the 3 candles before it and not below the highs of the 3 after it, so a tie counts once, at the first candle (swing low: the mirror).
- The upper line runs through the first and the last swing high of the pattern, the lower line through the first and the last swing low.
- Every swing point of a triangle, wedge or channel is within 1.2% of its line.
- Triangle and wedge lines count as flat when they move less than 1% across the pattern.
- Triangles and wedges narrow to at most 75% of their starting width.
- Ascending triangle: flat top, rising bottom. Descending: falling top, flat bottom. Symmetrical: falling top, rising bottom.
- Rising wedge: both lines rise. Falling wedge: both lines fall. Lines that stay parallel instead make a channel.
What it shows
A wedge is a trend that is still moving but covering less ground with each swing. That is what sets it apart from a plain channel, where the swings stay the same size.
In a rising wedge, price makes higher highs and higher lows, so on the surface the trend is up. But each new high clears the last one by less, while the lows keep climbing quickly underneath. Buyers are still winning, but their wins are getting smaller. Textbooks read it as a sign that the rise is tiring.
In a falling wedge, price makes lower highs and lower lows, so the trend is down. But each new low undercuts the last one by less, while the highs drop faster. Sellers are still in charge, yet each push gains them less. The classic reading is that the decline is running out of force.
In the two charts above, you chose between a rising wedge, a falling wedge and a symmetrical triangle. The answer comes from the direction of the two lines, not from where price ended: both rising, both falling, or one of each.
Rising wedge vs falling wedge
| Rising wedge | Falling wedge | |
|---|---|---|
| Upper line | Rising | Falling, steeper |
| Lower line | Rising, steeper | Falling |
| Swings | Higher highs, higher lows, shrinking | Lower highs, lower lows, shrinking |
| Classic reading | The rise is losing strength | The fall is losing strength |
| Close traders usually wait for | Below the lower line | Above the upper line |
Most often confused with: the triangle and the channel
A triangle also has converging lines, but one of them is flat, or the two point at each other from opposite directions. If you can see one line rising and the other falling, it is a symmetrical triangle, the third choice in the exercise. If both rise, or both fall, it is a wedge. A channel is the other look-alike: both lines slope the same way, but they stay parallel. On this site, the gap must shrink to 75% of its starting width or less before the shape counts as a wedge; a gap that stays between 80% and 125% of its starting width is a channel. A short falling wedge right after a sharp rise can also look like a bull flag; the flag's edges run roughly parallel, while the wedge's narrow.
What it does not tell you
The wedge does not tell you when it will end. Price can keep grinding inside a wedge for a long time, and many wedges break the "wrong" way. It does not give a price target either. Some chart readers project the wedge's widest height from the break, as a measured move. That is a drawing convention, not a forecast.
How reliable is it?
There is no reliable statistic for wedges. The automated study by Lo, Mamaysky and Wang (2000) tested triangles, rectangles and broadening patterns, among others, but not wedges as a separate shape. We know of no peer-reviewed test with fixed wedge rules that we could cite. Wedges are also hard to define consistently: two people drawing lines by hand on the same chart often disagree on where the wedge starts.
Where the idea is proven wrong
Each wedge carries a reading, and each reading has a point where it fails. The rising wedge says the rise is tiring. If price closes above the upper line and keeps rising, buyers were not tired after all. The falling wedge says the fall is tiring. If price closes below the lower line and keeps falling, sellers still had plenty left. And if a swing point sits more than 1.2% away from its line, the site does not classify the shape as a wedge, because price is no longer respecting its edges.
Volume
Many sources describe volume fading as a wedge narrows. Volume bars are not part of this site's practice charts yet, so you judge each wedge by its two lines.
Frequently asked questions
Is a falling wedge bullish?
It is usually read as bullish, because each new low is shallower than the one before, which suggests selling pressure is fading. The reading is a tendency described in textbooks, not a rule. A falling wedge can keep falling, and some break through the lower line instead of the upper one.
Is a rising wedge bearish?
The classic reading is bearish: price still makes higher highs, but each gain is smaller, which suggests buyers are tiring. The reading only becomes a completed pattern on a close below the lower line. Until then, it is an uptrend with shrinking swings, and it can continue.
What is the difference between a wedge and a triangle?
In a wedge, both lines slope in the same direction while closing in. In a triangle, one line is flat, or the two lines slope in opposite directions. On this site, a line is flat if it moves less than 1% over the pattern. Two rising lines make a rising wedge; a flat top with rising lows makes an ascending triangle.
What is the difference between a wedge and a channel?
Both have two lines sloping the same way. In a channel the lines stay roughly parallel, so swings keep the same size. In a wedge the lines converge, so swings shrink. This site counts a wedge when the gap narrows to 75% of its starting width or less, and a channel when it stays between 80% and 125%.