An invented price line: a rise in which each new high gains less than the last while the lows keep climbing, and then a fall, outlined by two rising lines that converge, one across the highs and a steeper one under the lows.
An invented chart, drawn to show the shape of a rising wedge. Not market data.
Also searched asascending wedge · rising wedge chart pattern · bearish wedge · wedge pattern
How to recognise a rising wedge
- Higher highs and higher lows.
- Both lines slope upward. That is what separates a wedge from a triangle.
- The lower line is the steeper one, so the two converge.
- Each push to a new high adds less than the one before.
What it is taken to mean
It is read as a rise that is losing force: the price is still going up, but with less and less to show for each attempt. Textbooks class it as bearish. At the end of a rise it is called a reversal; as an upward drift within a fall it is called a continuation.
That is a reading, and no more. A pattern is a description of what a price did, not a forecast of what it will do. Textbooks file this one under “either way”, which is a habit of naming and not a rule the market keeps.
How it is conventionally measured
The textbook measure is the height of the wedge at its widest, taken down from the point where the lower line broke. Some authors use the start of the wedge instead. Both are conventions and neither is a prediction.
What traders check
- Whether both lines really rise and really converge. Parallel lines make a channel, which is a different shape.
- How many times each line has been touched.
- Whether the price has closed below the lower line.
Where people go wrong
- Calling the top while the price is still inside the wedge. A rising wedge is, until it breaks, a price that is rising.
- Confusing it with an ascending triangle, whose upper line is flat.
- Treating the textbook measure as a destination.
On a real chart
Textbook shapes are rare. A real chart is ambiguous: the peaks are uneven, the lines can be drawn two or three ways, and the same candles are a rising wedge to one reader and something else to another. Most shapes are also recognised only once they are finished, which is after the move they are said to announce has begun.
The picture on this page is invented. It was drawn by hand to show the shape as plainly as possible, with every awkward detail left out. It is not market data and it records nothing that happened.
Questions people ask
- Is a rising wedge bullish or bearish?
- It is classed as bearish, although the price inside it is rising. The class comes from the narrowing: each new high gains less. It describes the drawing and does not say what happens next.
- What is the difference between a rising wedge and a channel?
- In a channel the two lines are parallel. In a wedge they converge.
- Does a rising wedge predict a fall?
- No. It describes what a price did while the shape formed. Published studies of chart patterns disagree about whether they tell anything about the next move, and the tidy examples in textbooks were chosen afterwards, when the outcome was known. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern described here says nothing certain about what a price will do next.