Wedge pattern. The last out of all the trading pattern that we have been discussing over the last week.
Here is the perfect example – rising wedge.
Now, the falling wedge.
It can usually be spotted after the downtrend, in case you were wondering. In case you see a wedge forming on the end of the downtrend, that means that soon we are going to see a rapid surge, as this is the main purpose of the wedge pattern.
It can also be formed right after the up movement as a signal for continuation of the trend. As the contrast for the rising wedge it is a pattern for the bullish market.
In the picture we see the falling wedge that is going to serve as a reversal trend indicator.