Rising and falling wedge
Converging boundaries that both slope in the same direction.
What to look for
- Both boundaries slope up or down
- Successive swings contract
- Minimum contacts and duration are fixed
Both swing lines rise as the distance between them shrinks. In this example, the pattern completes only when a candle closes below the lower line.
For a falling wedge, use two falling lines that move closer together and wait for a close above the upper line. Keep continuation and reversal versions separate.When the pattern is confirmed
A close through the boundary opposite the wedge slope, or a continuation rule tested separately.
Where the idea is wrong
A return through the broken boundary or the last internal swing.
The easy mistake
A wedge can resolve either way; the familiar reversal story is not a complete rule.
A complete rising and falling wedge example
Draw two same-direction, converging boundaries through swings selected by a fixed rule. Show the familiar opposite-slope break and a same-direction continuation so the geometry is not presented as a promise.
First rule to test
Opposite-slope close — enter only after a complete close through the boundary opposite the wedge slope.
Alternative rule
Confirmed retest — wait for that break to retest the boundary and close away from it before entering.
Place it where the pattern is wrong
Place the example stop one fixed ATR fraction beyond the final internal swing on the far side of the broken boundary.
Context, trigger and risk
The pattern handles timing. The other tools decide whether the location makes sense and how far normal price movement can reach.
Keeps swing selection and line contacts consistent.
Measures contraction and standardises the stop buffer.
Provides an optional momentum-divergence comparison, not the entry itself.
First exit to test
Wedge origin — close at the first major swing where the wedge began.
Alternative exit
Fixed-R comparison — use one chosen multiple of the initial risk for every wedge in the sample.
Patterns need a method around them
Open a related strategy to see the wider market filter, entry, stop, exit and no-trade rule.
RSI divergence reversal
Tests whether a mismatch between price and RSI swings adds value after exhaustion.
- ENTRY
- Enter next bar open after price closes beyond the highest high of the five bars ending at the confirmed second low for bullish divergence; mirror below the five-bar low for bearish divergence.
- STOP
- Stop is 0.20 × ATR(14) beyond the second price pivot. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 20 completed H4 bars if neither stop nor target has traded.
Bollinger squeeze
Tests whether unusually narrow bands precede a tradable volatility expansion.
- ENTRY
- Enter at the next H1 open in the direction of the first eligible release close.
- STOP
- Place stop at the opposite side of the frozen six-bar range. Risk 0.50% equity, rounded down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 16 completed H1 bars if unresolved.
Support and resistance rejection
A framework for testing reactions at levels that genuinely predate the trade.
- ENTRY
- Enter at the next H1 open after the first qualifying rejection close back above the prior-day low or below the prior-day high.
- STOP
- Place stop 0.20 × ATR beyond the rejection candle extreme. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit after 12 completed H1 bars if neither stop nor target trades.
Try it on older charts
Record both resolutions without relabelling the pattern after the break.