![]() ![]() The price oscillates within two lines that move closer together to make a pattern. ![]() It forms when the price is making higher highs and higher lows, which appears by a contracting range in prices. In either case, a downside break from a rising wedge pattern is a technical sell signal or short sell signal. The trend lines drawn above the highs and below the lows on the price chart pattern can converge as the price slide loses momentum and buyers step in to slow the rate of decline. When a security’s price has been falling over time, a wedge pattern can occur just as the trend makes its final downward move. In these cases, traders start looking for opportunities to sell. The closer the support and the resistance lines get to each other during the uptrend, the slower the momentum gets. Do You Want The Best Course About Candlestick Patterns? This is common in a market with immense selling pressure, where the bears take control the moment support is broken. Notice in the chart above, EURUSD immediately tested former wedge support as new resistance. Wedge patterns are usually characterized by converging trend lines over 10 to 50 trading periods.
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