Falling Wedge Setup
Two converging downsloping trendlines with contracting volume — a wedge where each rally and pullback gets tighter. Despite the bearish-looking slope, the contraction signals exhaustion of supply. Resolves with an upside breakout.
Setup Criteria
- › Both upper and lower trendlines slope downward
- › Lines converge — pattern narrows over time
- › Volume contracts as pattern matures
- › Often forms inside a larger uptrend (continuation)
Entry
Breakout above the upper trendline on volume.
Stop Loss
Below the most recent low inside the wedge.
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Pattern Diagram
Popularized By
Classic
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Pattern Info
LegendClassic
Difficulty
Intermediate
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