Falling Wedge (Downside Wedge)

By Lawrence

A Wedge in chart often points to weaknesses in current expansion direction. It is a common reversal setup.

A Falling Wedge is a chart formation with lower high and lower low prints from swing to swing, where the high points can often be connected by a straight line (but not a necessary condition), and so are the low points. As the low points failed to drop as quickly as the high points, a break of the lowest high point will lead to a quick run up towards the first high of the wedge.


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