A falling wedge is a converging formation where both the highs and the lows fall, but the highs fall faster — so the range narrows as price grinds down. It is a bullish formation despite its downward shape, and it completes on a break of the upper boundary.
- 1Converging boundaries — range narrowing
- 2Break of the upper boundary
No instance passed the hard criteria in the last 7 days. This one is 9 days old and is dated as such rather than re-presented as current.
Run this falling wedge pattern read yourselfWhat the engine actually checks
“Looks like one” is not a rule. Detection requires every hard criterion and scores the confluences — fail a hard criterion and it is not this setup, it is a hope with a nickname.
Hard criteria — all required
- ▪Both boundaries sloping down, with the upper boundary steeper than the lower.
- ▪At least two touches on each boundary — a line through one point is not a boundary.
- ▪Range contracting across the formation.
Confluences — weighted, not required
- ▫Volume declining into the apex.
- ▫Formation appearing as a pullback within a larger uptrend rather than as a standalone downtrend.
- ▫Break occurring before the final third of the wedge — apex-adjacent breaks are weaker.
Trading it
- 1Where you are wrongA close below the lower boundary. Because the boundaries converge, this stop tightens as the formation matures — which sounds attractive and is the reason many traders enter too late, near the apex, where the stop is tight and the noise has nowhere to go but through it.
- 2EntryThe break of the upper boundary. Entering inside the wedge on an anticipated bounce off the lower boundary is a materially different trade with a materially worse hit rate, and it is the most common way this pattern is misused.
- 3ObjectiveProject the height of the wedge at its widest point from the breakout. On the daily this is often a large distance; on intraday charts the measured move frequently completes within a session.
Worked example — real numbers
wedge height 180 projected from the break at 3480. A valid formation offering under about 1.5R is still a valid formation and still not worth taking — valid and worth it are different questions.
Size this trade against your account →The scoreboard
Resolution by grade, market and timeframe — because a single blended number would let strong contexts carry weak ones, which is how every invented “success rate” in this category is constructed.
| Grade | Market | Timeframe | Resolution | Sample |
|---|---|---|---|---|
| A | Crypto | 1H–4H | collecting | no resolved sample yet |
| A | Crypto | 1D | collecting | no resolved sample yet |
| A | Equities | 1H–4H | collecting | no resolved sample yet |
| A | Equities | 1D | collecting | no resolved sample yet |
| A | FX | 1H–4H | collecting | no resolved sample yet |
| A | FX | 1D | collecting | no resolved sample yet |
| B | Crypto | 1H–4H | collecting | no resolved sample yet |
| B | Crypto | 1D | collecting | no resolved sample yet |
| B | Equities | 1H–4H | collecting | no resolved sample yet |
| B | Equities | 1D | collecting | no resolved sample yet |
| B | FX | 1H–4H | collecting | no resolved sample yet |
| B | FX | 1D | collecting | no resolved sample yet |
| C | Crypto | 1H–4H | collecting | no resolved sample yet |
| C | Crypto | 1D | collecting | no resolved sample yet |
| C | Equities | 1H–4H | collecting | no resolved sample yet |
| C | Equities | 1D | collecting | no resolved sample yet |
| C | FX | 1H–4H | collecting | no resolved sample yet |
| C | FX | 1D | collecting | no resolved sample yet |
Where this traps people
Falling Wedge vs Rising wedge
Perfect mirror: a rising wedge converges upward and typically resolves down. Both are counterintuitive — the shape points one way and the resolution goes the other — and that counterintuitiveness is precisely why they are the most misread pair in classical charting.
Drop your chart and the engine checks it against the same hard criteria listed above — the ones it uses on every scan. First read is free and needs no account.
Questions traders actually ask
- Is a falling wedge bullish or bearish?
- Bullish. The formation slopes down, which makes it feel bearish, but converging lower highs and lower lows describe selling that is losing force. The break is typically upward, and the counterintuitive direction is the main reason traders fade it incorrectly.
- How is it different from a descending triangle?
- A descending triangle has a flat lower boundary with falling highs; a falling wedge has both boundaries falling. The flat support in a triangle is the level everyone watches, which changes the behaviour around it considerably.
- Where do you enter a falling wedge?
- On the break of the upper boundary, not on an anticipated bounce inside the formation. Entering early is the difference between trading a completed pattern and guessing that one will complete.
- Do falling wedges work in crypto?
- They form frequently in crypto because the market trends hard and consolidates in compressions. Thin weekend liquidity produces tidier-looking wedges than the participation deserves, so session context matters more here than in equities.
- What invalidates a falling wedge?
- A close below the lower boundary. Because the boundaries converge, that level rises through the formation — the stop is tightest and least forgiving exactly when the pattern is most mature.
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