Falling Wedge
BullishReliability: MediumAlso called · descending wedge
Price narrows downwards while the rate of decline slows.
How to spot it
- Both highs and lows fall, but the lows fall more slowly
- Volume declines
Why this shape forms
Both highs and lows fall, but the lows fall more slowly. Selling pressure is running down, and the narrowing is how you see it.
Where it actually means something
Found at the end of downtrends and inside corrections within uptrends. Either way it resolves upward more often than not.
What else to check
A close above the upper line with volume returning. Volume drying up through the squeeze is the healthy version.
This means you're wrong
Void if the upper trendline holds and the lows start falling faster.
The mistake beginners make
Confusing it with a plain downtrend. Always check that the range is narrowing.
Easy to confuse with
Often mistaken for a bear flag. A flag runs parallel; a wedge narrows. Drawing the lines and checking whether the width shrinks decides it.
Real examples from the community
Patterns are probabilistic tendencies, not guarantees. This is not investment advice.