Falling Wedgepattern.
A narrowing decline between two falling trendlines that the book reads as weakening supply. It looks bearish, but its usual outcome is bullish; where it forms decides whether it is a continuation or a reversal.
- Resistance falls faster than support.
- Bullish in outcome despite the falling shape.
- Continuation in an uptrend, reversal after a long decline.
- Volume typically declines inside the wedge.
Idealised outline. The dashed yellow line is the support or resistance the book asks you to draw before naming the pattern.
How the book reads it
- 01
Structure — how to draw it
Both lines slope downward, but the resistance line falls faster than the support line, so the range narrows as price drifts lower. New lows become marginal and bounces stay shallow.
- 02
Psychology — who is in control
Sellers are still active but their follow-through weakens, while patient buyers absorb supply at lower levels. Price falls with effort, not dominance, and the shrinking range suggests that selling energy is fading.
- 03
Confirmation
The book requires a decisive close above the falling resistance line, ideally with expansion in range or volume. A retest from above that holds as support strengthens the bullish reading.
- 04
Risk — where the idea is wrong
The book places invalidation below the last swing low near the bottom of the wedge, or below the support line when the structure is clean. The wedge’s height projected from the breakout is the first reference.
- 05
Common trap
Reading the falling highs and lows as continued weakness is the trap the book describes. A breakout that quickly slips back inside the wedge and holds there is treated as weak or unconfirmed.
On real charts
Annotated by Mr. Chartist for the book: the structure, the breakout, the pattern's height and the level that proves the idea wrong. Historical charts for education — not a view on any stock today.
More diagonal patterns
Rising or falling boundaries that reveal changing momentum, participation, pressure, and direction.
From the book · Diagonal support & resistance
The full Falling Wedge chapter — in the book.
Development stages, volume behaviour, breakout quality, traps and more annotated case studies.
