Don't trade with money you can't afford to lose. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. By viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general opinion provided here by Daily Price Action, it's employees, directors or fellow members. Rising and falling wedges will often contribute to the formation the head and shoulders or inverse head and shoulders patternĭisclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information.Potential take profit areas are defined by the recent swing highs or lows.A typical stop loss strategy is to place the stop loss beyond the last swing high or low of the pattern.The entry comes on a retest of the broken level and can sometimes occur immediately without a rounded retest.The breakout is confirmed on a close below support for a rising wedge and above resistance for a falling wedge.

The time frame used depends on the time frame that is respecting both levels the best.

The wedge must have three touches on each side in order to be considered tradable.

A rising wedge is often seen as a topping pattern while a falling wedge is more often than not a bottoming pattern.

Like the strategies and patterns we trade, there are certain confluence factors that must be respected. The rising and falling wedge are no exception.īelow are some of the more important points to keep in mind as you begin trading these patterns on your own. However, by applying the rules and concepts above, these breakouts can be quite lucrative.īoth of these patterns can be a great way to spot reversals in the market.

As you can see, there is no “one size fits all” when it comes to trading rising and falling wedges.Īs you can see, there is no “one size fits all” when it comes to trading rising and falling wedges.

Falling wedge in stocks