What is a Wedge Pattern?

What is a Wedge Pattern?

A wedge is a converging price pattern where both trendlines slope in the same direction. Rising wedges usually signal distribution, while falling wedges suggest accumulation.

Characteristics of Wedges

• Converging trendlines: The range narrows as buyers and sellers battle for control.
• Volume contraction: Activity often dries up before the breakout.
• Break direction: Wedges typically break opposite the direction of the slope.

Trading Wedge Patterns

• Draw precise trendlines through multiple touches to ensure the pattern is valid.
• Set alerts near the apex so you are ready when price accelerates.
• Confirm the breakout with volume, momentum indicators, or a close beyond the pattern.
• Project targets using the widest part of the wedge or nearby structure levels.