Falling Wedge Pattern
Original schematic showing the guide's principal visual relationships.
Pattern anatomy
Converging downward trendlines where lower highs and lows form with diminishing downside progress.
Both boundaries fall, but upper resistance falls faster than lower support.
How it works
Identify the prior trend first, mark repeated swing highs and lows, then draw only the support, resistance, or neckline justified by those pivots. A pattern remains provisional until price closes beyond its confirmation boundary; visual resemblance alone is not enough.
How to read it
The narrowing declines suggest sellers are losing control. A close above upper resistance is the traditional bullish confirmation.
Confirmation checklist
Look for an established prior trend, a completed boundary break, and preferably expanding volume or momentum confirmation. A reversal pattern formed without a trend to reverse is weaker evidence.
Limitations and false signals
A falling wedge can continue downward when the broader trend remains weak. Premature entries inside the wedge face repeated whipsaws.