Falling Wedge (FW)

The Falling Wedge pattern is a well-known and easily recognizable chart pattern. It is classified as a Bullish Continuation Pattern and has a success rate of over 50% in meeting price targets.

Retracement usually occurs to the 61.8 Fib Level but can go as deep as the 786 Fib Level. The end of the Wedge can often be signalled by a Pin Bar and Divergence.

If a Pin Bar prints, it can be an optimal entry point (A) with the stop below the prior Low of the formation. Breakout of the formation generally occurs when the pattern is 60-70% complete.

Alternatively, a second entry may present itself at the Break and Retest of the formation (B).

The initial target or Measured Move is the high before the formation commences.

Falling Wedge

CM8-Falling Wedge-Example