Definition
A wedge is a converging chart pattern whose two boundary lines both slope in the same direction while still narrowing toward each other. This sloping convergence is what separates a wedge from a triangle, where at least one line is flat or the lines slope toward a common apex from opposite tilts.
A rising wedge has both lines angled upward, with the lower line rising more steeply so the range tightens. A falling wedge has both lines angled downward, with the upper line falling more steeply. The slope gives the wedge a tilted, leaning appearance.
Why it matters
How it works
A wedge forms when price keeps making progress in one direction but with steadily shrinking momentum — each push covers a little less ground than the last, while the pattern as a whole still drifts up or down. That fading momentum inside a still-moving market is the warning. A rising wedge shows buyers losing steam even as price grinds higher, which often precedes a downside break; a falling wedge shows the reverse.
The signal, as with all converging patterns, is the breakout through one of the boundary lines, ideally confirmed by volume.