![rising wedge pattern rising wedge pattern](https://www.newtraderu.com/wp-content/uploads/2021/01/16-Rising-Wedge-2048x1365.png)
That’s why it’s called a continuation signal yo! In this case, the price broke to the down side and the downtrend continued. Only this time it acts as a bearish continuation signal.Īs you can see, the price came from a downtrend before consolidating and sketching higher highs and even higher lows. Now let’s take a look at another example of a rising wedge formation. Just like in the other forex trading chart patterns we discussed earlier, the price movement after the breakout is approximately the same magnitude as the height of the formation. They pushed the price down to break the trend line, indicating that a downtrend may be in the cards. See how price broke down to the downside? That means there are more forex traders desperate to be short than be long! Notice how price action is forming new highs, but at a much slower pace than when price makes higher lows.
![rising wedge pattern rising wedge pattern](http://cdn.dailypriceaction.com/wp-content/uploads/2015/04/Rising-wedge-entry.jpg)
In this first example, a rising wedge formed at the end of an uptrend. On the other hand, if it forms during a downtrend, it could signal a continuation of the down move.Įither way, the important thing is that, when you spot this forex trading chart pattern, you’re ready with your entry orders! If the rising wedge forms after an uptrend, it’s usually a bearish reversal pattern.
![rising wedge pattern rising wedge pattern](https://a.c-dn.net/b/2RkD4k/rising-wedge-pattern_body_RisingWedge.png)
With prices consolidating, we know that a big splash is coming, so we can expect a breakout to either the top or bottom. This leads to a wedge-like formation, which is exactly where the chart pattern gets its name from! This indicates that higher lows are being formed faster than higher highs. Here, the slope of the support line is steeper than that of the resistance. Rising WedgeĪ rising wedge is formed when price consolidates between upward sloping support and resistance lines. Wedges can serve as either continuation or reversal patterns. When you encounter this formation, it signals that forex traders are still deciding where to take the pair next.Ī Falling Wedge is a bullish chart pattern that takes place in an upward trend, and the lines slope down.Ī Rising Wedge is a bearish chart pattern that’s found in a downward trend, and the lines slope up. Wedges signal a pause in the current trend. It means that the magnitude of price movement within the Wedge pattern is decreasing. In a Wedge chart pattern, two trend lines converge.