Trends/Reversal patterns

Rising wedge

Both boundary lines slope up, but the lower one rises faster, so the lines close in and price is squeezed.

Reversal patternsBest on 6M, 1Y, 3YAlso called ascending wedge

Illustration of the rising wedge shape. It is a sketch, not real price data.

What it shows

A rising wedge has an upper line and a lower line that both slope up and move toward each other. Price makes higher highs and higher lows, but the highs rise more slowly than the lows.

It is often found near the end of a rise and is usually described as a reversal pattern. It can also appear as a pause inside a fall. It is complete only when price closes outside the lines.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find at least 3 touches on the upper line and 3 on the lower line.
Require both slopes to be positive and the lower slope to be steeper.
Require the lines to converge: the gap at the end is at most 70% of the gap at the start.
Mark complete when a close falls below the lower line by more than the margin.

Starting values: Touches per line 3; Convergence gap at the end at most 70% of the start; Margin 1.0%. These are proposed and will be tuned on real price data before launch.

How to read it

Red is the upper line, teal is the lower line.
The gold dot is the first close below the lower line.
The narrower the wedge, the closer price is to the apex.

Status labels you may see

Label	What it means
Forming	Price is between the lines.
Near the lower line	Within 2% above it.
Broken down	Closed below the lower line.
Broken up	Closed above the upper line.

What cancels it

A close above the upper line.

What traders check next

Volume through the wedge.
How near the apex price has moved.
Whether momentum is slowing.

Limits

Breaks can go either way.
Short wedges are noise.
Rules about slope and convergence are our own choices.

Try it in forecastviz

Open any ticker and choose Reversal patterns → Rising wedge in the left menu.
Switch between 6M, 1Y, 3Y to see how the picture changes.
Compare with Falling wedge and Ascending triangle on the same chart.

Open on a ticker

Questions

Which way does it break?

It is often described as breaking down, but it can break up. We do not claim a rate.

How is it different from an ascending triangle?

An ascending triangle has a flat top. A rising wedge has a rising top.