Longer trends will often create designs other than a wedge or a flag. A typical wedge or flag lasts longer than one month but less than three months. Since the data creating the design is typically slanted against the current trend, a descending flag is considered a “bullish” indicator, while a wedge is viewed as a “bearish” predictor. Since the data creating the design is typically slanted against the current trend, a descending flag is considered a bullish indicator, while a wedge is viewed as a bearish predictor. A bullish signal occurs when prices break above the upper trendline. A bullish signal occurs when prices break above the upper trendline. This is because prices edge steadily lower in a converging pattern i.e. Unlike the Triangles where the apex is pointed to the right, the apex of this pattern is slanted downwards at an angle. A bearish signal occurs when prices break below the lower trendline.Ī Bullish Wedge or Flag consists of two converging trend lines. This is because prices edge steadily higher in a converging pattern i.e. Unlike the Triangles where the apex is pointed to the right, the apex of this pattern is slanted upwards at an angle. The “falling wedge” is often called a “flag” since it more resembles a pointed flag more than a typical triangle.Ī Bearish Wedge, or Flag, consists of two converging trend lines. Descending: The descending triangle is bearish. Ascending: The ascending triangle is a bullish pattern. The wedge need not be upward facing and can easily be an inverted triangle. Symmetrical: The symmetrical triangle points sideways, which tells you it’s a horizontal pattern that becomes a setup for a move upward or downward once more price movement provides a bullish or bearish indicator. A wedge in the financial universe describes a triangular shape formed by the intersection of two trendlines, which form the apex.
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