Wedge patterns offer traders a clear framework to understand price compression, momentum shifts, and potential reversals. As shown in the image, the four primary structures—Falling Wedge, Rising Wedge, Descending Broadening Wedge, and Ascending Broadening Wedge—each reveal how buyers and sellers gradually lose or gain control.
A Falling Wedge typically reflects diminishing selling pressure and often leads to bullish reversals, while a Rising Wedge signals exhaustion in an uptrend and increased downside risk. Broadening wedges highlight expanding volatility, warning traders of instability before major directional moves.
Professional traders don’t trade patterns blindly. They wait for confirmation, align setups with higher-timeframe trends, and define risk using disciplined stop-loss placement. When combined with volume and market context, wedge patterns become a strategic edge, not a prediction tool.
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