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How Do I Trade A
Falling Wedge Pattern?
The Falling Wedge stock chart pattern is generally regarded as a reversal pattern, and in a down trending stock it usually marks the end of the down trend and the beginning of an up trend. In an up trending stock it usually is a continuation pattern. In either case it is a bullish formation. Look at the chart below.
This stock was in a down trend and began a series of lower highs and lower lows. When a trend line is drawn connecting the highs and one connecting the lows, they converge to form the wedge. The trade is usually made when price breaks through the upper trend line. This formation is found in all time frames, and can used as a stock or option strategy with a high degree of success.Stock Trading School Continue your trading education by searching out these pattern in different time frames. Use the 10 minute charts as if you where day trading. Stock market millionaires like Warren Buffett trade long term, so try finding them in weekly and monthly charts for long term trades. Practice spotting these gems and add them to your stock trading resources.
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