A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.
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Lesson 5: 6.4: Wedge Patterns
Differentiate Rising and Falling wedges and identify high-probability reversal and continuation zones.
1. Rising and Falling Wedges
Wedges are characterized by converging support and resistance lines, both sloping in the same direction. They differ from triangles because they slope either entirely upward or downward.
A Rising Wedge features converging lines sloping upward. When it forms in an uptrend, it signals exhaustion and acts as a bearish reversal pattern. When it forms in a downtrend, it acts as a bearish continuation pattern.
A Falling Wedge features converging lines sloping downward. In a downtrend, it represents selling exhaustion and acts as a bullish reversal. In an uptrend, it is a bullish continuation pattern.
Click to enlargeTechnical Market Structure Blueprint
Interactively map key institutional Price Action patterns. Switch between the 4 technical blueprints below and click the glowing blue hotspots to dissect the market mechanics.
Pattern Technical Explainer
Select any glowing node on the technical chart to inspect the institutional structure details.
KNOWLEDGE RECONNAISSANCE
What does a Rising Wedge that forms at the peak of an uptrend typically signal?
More lessons in this module
- 6.0: Introduction to Chart Patterns
- 6.1: Flag Patterns
- 6.2: Pennant Patterns
- 6.3: Triangle Formations
- 6.5: Channel Trading Mechanics
- 6.6: Head and Shoulders Formations
- 6.7: Double Tops and Bottoms
- 6.8: Cup and Handle Pattern
- 6.9: Ascending and Descending Triangle Breakouts
- 6.10: Pattern Failure & Trap Mechanics
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