Price drifts lower between two downward-sloping lines that converge. Sellers lose steam and the break typically comes to the upside.
How to identify it
- Lower highs and lower lows inside converging lines
- Upper line is steeper than the lower line
- Selling momentum fades on each new low
Entry
Buy the close above the upper wedge line.
Stop loss
Below the last wedge low.
Target
The start of the wedge.
Invalidation
Price breaks down below the lower line with strength.
Does it work for you?
Textbook reliability means little until you know your own numbers. Tag your falling wedge trades in TradeZento and it shows your win rate, average win and loss, and P&L per trade for this pattern, so you know whether to keep it in your playbook.