Rising and Falling Wedge Patterns

Updated October 23, 2026

Wedges are reversal patterns formed by two converging trend lines moving in the same direction. Unlike triangles, both boundaries slope the same way, and that distinction is what makes them reversal rather than continuation signals. Updated September 2026.

Analyzing the Wedge pattern

The two forms

• Rising wedge: bearish reversal, forming at the end of an uptrend with both lines sloping up

• Falling wedge: bullish reversal, forming at the end of a downtrend with both lines sloping down

• Minimum pivots: five significant turning points, three of one type and two of the other

• Convergence: the two lines meet at a point if extended, defining the pattern width

• Validity rule: the pattern should complete within the first two thirds of that width

• Best suited to: two-way markets where both long and short positions are available

The rising wedge

A rising wedge forms at the end of an uptrend. Both the support and resistance lines slope upward, but they converge because the support line rises more steeply.

Price continues making higher highs, but each advance is smaller than the last. That narrowing is the signal: buying pressure is weakening even while price still rises.

At least five significant pivots are required. More is acceptable, but fewer means the pattern is not established.

After the final top, price returns to the support line. A break of that line completes the pattern and triggers the short entry.

Failed Rising Wedge

BTCUSDT at the daily time frame

Trade on the Rising Wedge Pattern

Rising Wedge Pattern

The two thirds rule

This is the most useful validation criterion and it is worth understanding properly.

Extend both converging lines until they intersect. The horizontal distance from the start of the pattern to that intersection is the full width, X.

A valid wedge completes within the first two thirds of X. Ideally, the final top forms right at the end of that zone. As price approaches the apex, the probability of a clean reversal falls.

The reason is that a pattern running to the apex has compressed to nothing: there is no range left to break out of, and price typically drifts through the convergence rather than reversing from it. If the wedge has consumed more than two thirds of its width without resolving, treat it as invalidated rather than pending.

Trading the rising wedge

• Entry: short, after the breakout candle closes below the support line

• Stop loss: above the last top, or tighter above the breakout candle

• Target: the distance between the lowest low and the lowest high, projected down from the break

Waiting for the candle to close below the line, rather than entering as price touches it, filters out the intrabar spikes that reverse before the period ends.

The falling wedge

The falling wedge is the bullish mirror image, forming at the end of a downtrend with both lines sloping down and converging.

Falling Wedge Pattern

Each decline is smaller than the last, indicating selling pressure is fading. After the third bottom forms, a break of the upper resistance line triggers the long entry.

• Entry: long, after the breakout candle closes above the resistance line

• Stop loss: below the last bottom, or below the breakout candle

• Target: measured the same way, projected up from the break point

The same two thirds rule applies. Measure the horizontal distance to the apex and confirm the pattern resolves within the first two thirds of it.

Failed Falling Wedge

GBPUSD chart

Trade on the Falling Wedge Pattern

⅔ X Rule

When a wedge fails

Wedges fail, and the failure produces its own setup.

If a rising wedge is developing and price breaks above the resistance line instead of below support, the bearish premise has failed. Wait for the breakout candle to close above the line, then enter long with a stop below it.

The falling wedge fails in the same way, inverted: a break below support invalidates the bullish case and produces a short setup, with price often continuing down with strong momentum.

The target calculation stays the same in both failure cases. Having a defined response to failure is what makes wedges practical: you react to whichever line breaks rather than committing to a direction in advance.

In Elliott Wave terms

Wedges appear in Elliott Wave analysis as diagonals. A wedge in wave 5 is an ending diagonal, and one in wave 1 is a leading diagonal.

In both cases price moves convergently and the sub-waves decrease in size, which is the same compression described above expressed in wave terminology.

Checklist

• Count at least five significant pivots before treating the pattern as valid

• Extend the lines to their intersection and confirm the pattern resolves within two thirds of that width

• Check that each successive swing is smaller than the last, that compression is the signal

• Wait for the breakout candle to close beyond the line

• Have a plan for the failure case, it produces a tradable setup in the opposite direction

• Calculate position size from the stop distance rather than choosing it first

See related trading guides and compare charting platforms in our forex brokers section.

Wedge patterns: frequently asked questions

What is a rising wedge?

A bearish reversal pattern at the end of an uptrend, formed by two upward-sloping converging lines. Each advance is smaller than the last.

How many pivots are required?

At least five significant turning points. More is acceptable, fewer means the pattern is not established.

What is the two thirds rule?

Extend both lines to their intersection and measure that width. A valid wedge resolves within the first two thirds of it. Beyond that, the pattern is invalidated.

Elliot Waves Theory

Where does the stop go?

Beyond the last swing point, above the final top for a short or below the final bottom for a long, or tighter beyond the breakout candle.

What if the wedge fails?

The break of the opposite line produces a setup in that direction, with a stop beyond the breakout candle and the same target calculation.

How do wedges relate to Elliott Wave?

They appear as diagonals: an ending diagonal in wave 5 and a leading diagonal in wave 1, both showing the same convergent compression.