Rising Wedge Pattern
Price grinds higher between two upward-sloping trendlines that converge. Typically breaks downward.
Trading rules at a glance
- Entry
- Short on close below the lower rising trendline.
- Stop Loss
- Above the most recent swing high inside the wedge.
- Target
- The start of the wedge, or a measured move equal to wedge height.
How the Rising Wedge forms
Higher highs AND higher lows, but the slope of the highs is smaller than the slope of the lows — the trendlines converge upward. Volume declines as the wedge develops.
How to trade it
- Confirm at least three touches on each trendline.
- Wait for a decisive break below the lower trendline.
- Volume should expand on the breakdown.
- Shorts taken inside the wedge against trend are premature.
Common mistakes to avoid
- Shorting before confirmation inside a trend.
- Confusing a rising wedge with a bull flag.
- Ignoring higher-timeframe trend.
Real-world example
Gold formed a rising wedge throughout early 2011 before breaking downward in September 2011, marking the start of the multi-year bear market to 2015.
Best timeframes
The Rising Wedge works best on 1H, 4H, Daily charts. It can appear on lower timeframes but signal reliability drops significantly below the 1-hour chart.
Related patterns
Head and Shoulders
Three-peak formation that marks the end of an uptrend and the start of a downtrend. One of the most reliable reversal patterns in technical analysis.
Inverse Head and Shoulders
Mirror image of the head and shoulders pattern. Forms at the end of a downtrend and signals a bullish reversal.
Double Top
A resistance level tested twice without breaking, signaling the end of an uptrend. Looks like an "M" on the chart.
Double Bottom
Two troughs at similar support levels followed by a break above the intermediate peak. Looks like a "W" on the chart.