Reversal pattern · bullish bias
Falling Wedge pattern
A falling wedge has both boundaries sloping downward, with the upper line falling faster than the lower one. Price keeps making lower lows, but each drop loses momentum, and a break above the upper line is the bullish trigger.
How to identify a falling wedge
- Lower highs and lower lows inside two downward-sloping lines.
- The upper line is steeper, so the range narrows.
- Each new low adds less downside than the last.
What confirms it
A close above the upper trendline.
What invalidates it
A decisive close below the lower trendline.
How traders project a target
A common reference is the top of the wedge, where its first swing high formed.
Common mistakes
- Buying inside the wedge before any breakout.
- Mistaking a steady descending channel, with parallel lines, for a wedge.
- Ignoring a strong higher-timeframe downtrend.
Where it appears
Often marks the end of a correction within an uptrend, or the exhaustion of a longer decline.
Frequently asked questions
Is a falling wedge bullish?
Yes. Its bias is bullish, and it confirms on a close above the upper line.
What does a falling wedge tell you about sellers?
Sellers are still pushing to new lows, but with less force each time, which suggests the decline is losing energy.
Where is a falling wedge invalidated?
A strong close below the lower line shows selling has accelerated rather than faded.
Related chart patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.