Forex glossary
Wedge
A wedge has two converging boundaries sloping in the same direction. Rising wedges are often interpreted as bearish candidates and falling wedges as bullish candidates, depending on the preceding move. A breakout rule determines signal identification; geometry guarantees neither direction nor target attainment.
Illustrative example
How does it work in practice?
Assume highs rise from 110 to 112 while lows rise from 100 to 106, narrowing the range. A close beneath the lower line may meet a wedge-breakout rule without guaranteeing further decline.
A case to work through
Both lines rise, width stays constant
Hypothetically, earlier upper and lower levels are 110 and 100; later they are 114 and 104.
- Width is 10 at both points.
- Both boundaries rise equally, so these points describe a nonconverging channel.
What follows? Do not call it a wedge solely because it slopes upward.
Example boundary: More points and an explicit line rule are needed for full classification.
A useful distinction
Wedge / Flag
A wedge has converging same-direction boundaries; a flag is a small roughly parallel channel after a pole.
Check your understanding
Detect absent narrowing in a wedge candidate.
Show the answer and explanation
It falls from 10 to 7
Both boundaries rise, but the lower rises faster.
Geometry and pattern completion
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Read the fuller explanation
Related terms
Sources and documentation
- StockCharts – rising wedge
Converging same-direction boundaries and context-dependent breakout interpretation.
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