What does a "rising wedge" look like?

A bearish chart pattern, a rising wedge is made up of two trend lines that meet in the middle. The trend lines go up until they meet.

The first trend line connects the recent lower highs and higher highs, while the second trend line connects the recent lows. The result looks like an upside-down triangle. A rising wedge has the shape of a falling wedge.

Since the low is higher than the high and the lower trend line is steeper than the upper one, the rising wedge pattern could be seen as a bearish wedge.

Even though the falling wedges are all the same shape, the angle of the triangle and what the pattern suggests are the only things that make them different.

The rising wedge (ascending) pattern is bearish because it predicts that prices will go down or that there will be a break into a downtrend. The trade volume drops as the wedge grows.

Even though the wedge shows that the price is still going up, the drop in trade volume could mean that sellers are getting ready for a bearish breakout by consolidating their positions.

The falling wedge (descending) pattern, on the other hand, has a negative slope, which means it goes down. It also shows that a rebound is coming soon, which makes it a bullish pattern.

The interesting thing about a rising wedge is that it can show up as a continuation pattern during a downtrend or as a reversal pattern during an uptrend.

What do they look like?

The rising wedge pattern looks like a slice of pizza when two trend lines meet. With the rising wedge pattern, the highs get higher and the lows get lower.

The high points of the pattern must be covered by the resistance trend line. For the resistance line to hold, there must be at least two higher highs.

In the same way, make a support trend line that goes through the higher lows. You'll need at least two swing lows to make the support trend line.

After drawing the trend lines of resistance and support, you should see a triangle that looks like a wedge. In the rising wedge pattern, the top of the triangle must point up.

So, for this to be a rising wedge pattern, the resistance trend line needs to slope up.

Even though it might be hard to see in real time, traders and technical experts love the rising wedge pattern.

People often mix up the triangle pattern, which is a continuation formation, with the rising wedge pattern, which is a reversal formation.

The ascending wedge pattern is great for traders who want to short the market or use the signals to manage their long-term HODL positions because it gives clear signals for when to buy and when to sell.