![]() In a bullish trend what seems to be a Rising Wedge may actually be a Flag or a Pennant (stepbrother of a wedge) requiring about 4 weeks to complete. A rising wedge is more reliable when found in a bearish market. As far as volumes are concerned, they keep on declining with each new price advance or wave up, indicating that the demand is weakening at the higher price level. Prices usually decline after breaking through the lower boundary line. Although both lines point in the same direction, the lower line rises at a steeper angle then the upper one. ![]() In a rising wedge, both boundary lines slant up from left to right. When this pattern is found in a downtrend, it is considered a bearish pattern, as the market range becomes narrower into the correction, indicating that the correction is losing strength, and that the resumption of the downtrend is in the making. When this pattern is found in an uptrend, it is considered a reversal pattern, as the contraction of the range indicates that the uptrend is losing strength. The rising wedge pattern is characterized by a chart pattern which forms when the market makes higher highs and higher lows with a contracting range. Once prices move out of the specific boundary lines of a falling wedge, they are more likely to move sideways and saucer-out before they resume the basic trend. There comes the breaking point, and trading activity after the breakout differs. Volume keeps on diminishing and trading activity slows down due to narrowing prices. ![]() The upper descends at a steeper angle than the lower line. In a falling wedge, both boundary lines slant down from left to right. When this pattern is found in an uptrend, it is considered a bullish pattern, as the market range becomes narrower into the correction, indicating that the downward trend is losing strength and the resumption of the uptrend is in the making. When this pattern is found in a downward trend, it is considered a reversal pattern, as the contraction of the range indicat es the downtrend is losing steam. It helps in giving the trader a positive ratio of risk and reward in all cases.The falling wedge pattern is characterized by a chart pattern which forms when the market makes lower lows and lower highs with a contracting range. Once it is identified, you can quickly locate the stop level for the trader. The Rising Wedge pattern in an uptrend indicates a price reversal, while the formation of the pattern in a downtrend indicates a continuation of the trend. The stop level is identified from the top point of the pattern on the trending line of resistance. The two common ways of making an entry are either by waiting for a candle below the point of support trend before making an entry or entering the short position just when the support line is broken by the price irrespective of the candle close. There can be an entry point once the trend support line has been breached on the rising wedge. This is also referred to as divergence, which signifies that the uptrend movement is almost finished. One can observe the uptrend pattern by employing the volume tool on the chart that points at a fading volume in link to the ascending price prevalent in the market. Let’s consider the rising wedge pattern occurring as a continuation. Keep an eye on the break occurring under the support point for making a short entryĪ rising wedge pattern can be observed both as a continuation and a reversal pattern, as has been mentioned already.Confirmation of the overbought signals by using technical tools such as oscillators.Look for the divergence among price and volume by employing the volume function (You can use MACD as well).A link of the lower lows and higher highs with the help of the trend line that forms towards the narrow point.The formation of a rising wedge consolidation can be observed.In both these cases, there are different measures of identification that must be kept in mind.Ī rising wedge continuation pattern identification: ![]() There can be doubts in identifying the pattern owing to its possible interpretation as both a bearish continuation and a bearish reversal pattern. Identification of the Rising Wedge Pattern While Trading The falling wedge can be seen descending downwards in the middle of the two converging trend lines, finally reaching the apex point, which identifies the bullish pattern. A falling or a descending wedge pattern is majorly distinguished from the rising wedge pattern by a slant of the triangle. To quickly identify the rising wedge pattern, you must also know how the falling wedge pattern appears. However, irrespective of the position of this trend, you must keep in mind that this trend is always bearish. It is possible to ascertain the reversal and continuation patterns from the bearish chart formation based on the location and the ongoing trend. The rising wedge pattern also referred to as the ascending wedge, is a price pattern that comes into formation when the price is bound in the middle of two upward rising trend lines.
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