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Hello, traders, and welcome to another software update from your friends here at TrendSpider! In this release, we are happy to further the functionality of our Chart Pattern Recognition tool by adding Rising and Falling Wedge pattern discovery to our list of automated chart patterns. Let’s dig into the details!

How To Add Wedges To Your Chart

Wedge patterns can now be added to your chart automatically via the ‘Chart Patterns’ button in your top toolbar. Simply select the ‘Wedge, Falling’ and ‘Wedge, Rising’ options to see them on any chart they’re currently present on.

This is an image of the rising and falling wedge options within the chart patterns drop-down menu.

Rising and Falling Wedge Parameters

The Rising and Falling Wedge chart patterns offer several different settings that can be adjusted to influence where and how these patterns are drawn. In the image below, you’ll see two drop-down menus titled ‘Time Span’ and ‘Bands’.

This is an image of the parameters contained within the wedge pattern tool.

Time Span

For the ‘Time Span’ setting, traders can choose between short-term and long-term. As one would expect, the long-term option will identify patterns that take into account larger periods of price action whereas the short-term option will take into account smaller periods of price action.

Bands

The ‘Bands’ option allows traders to add bands around their rising and falling wedge lines. These bands can be measured via an ATR, a Standard Deviation, a Constant, or a Percentage value.

Rising and Falling Wedge Patterns, Explained

Rising and falling wedge chart patterns are two of the most common chart patterns observed by technical traders. A wedge pattern is formed when the price of an asset moves either directionally higher or lower and then starts to consolidate into a tightening range.

Rising Wedge

A Rising Wedge pattern is typically considered to be a bearish reversal pattern created when the price makes higher highs and higher lows into a tightening range. The top trend line represents a resistance level and the bottom trend line represents a support level.

When the price breaks below the bottom trend line, this represents a valid reversal. Pictured below is a textbook representation of price breaking down from a Rising Wedge pattern.

This is an image of a rising wedge on the daily chart of ETSY.

Falling Wedge

A Falling Wedge pattern is typically considered to be a bullish reversal pattern created by the price making lower highs and lower lows into a tightening range. The top trend line represents a resistance level and the bottom trend line represents a support level.

When the price breaks above the top trend line, this represents a valid reversal. Pictured below is a textbook image of a Falling Wedge pattern with the price having broken out to the upside.

This is an image of a falling wedge on the weekly time frame on the .

Scanning For Rising and Falling Wedge Patterns

Scanning for Rising and Falling Wedge patterns is a breeze. To do so, click the ‘Add Parameter’ option and then select the ‘Chart Pattern’ condition. Once selected, you’ll see a drop-down menu containing the options pictured below.

This is an image of the wedge pattern options in the market scanner.

If you’d like to scan for charts containing just the pattern itself, utilize the ‘Exists’ prompt. This will find all relevant charts containing the particular pattern you’ve chosen.

If you’re interested in defining the position of the price relative to the top or bottom trend line, you can do so using the ‘Bottom’ and ‘Top’ options.

In addition, we offer pre-built scans for many of the most basic Rising Wedge and Falling Wedge setups that traders might be interested in finding. To access these, simply type ‘Wedge’ in the search bar of your scanner.

This is an image of the shared wedge scans and the 'any wedge exists' scan selected.

Below is a list of the currently available pre-built scans.

Login to view New Scans!

Rising Wedge Scans

Rising Wedge Exists – Looks for a rising wedge to exist on the chart
Rising Wedge In Force – Looks for a rising wedge to exist on the chart and price is within the wedge
Rising Wedge Failed – Looks for a rising wedge to exist on the chart and price is trading above the top of the wedge
Rising Wedge Break Out – Looks for a rising wedge to exist on the chart and price is trading below the bottom of the wedge

Falling Wedge Scans

Falling Wedge Exists – Looks for a falling wedge to exist on the chart
Falling Wedge In Force – Looks for a falling wedge to exist on the chart and price is within the wedge
Falling Wedge Failed – Looks for a falling wedge to exist on the chart and price is trading below the bottom of the wedge
Falling Wedge Break Out – Looks for a falling wedge to exist on the chart and price is trading above the top of the wedge

Any Wedge Scans

Any Wedge Exists – Looks for both rising and falling wedges on the chart

As always, we hope you find these updates helpful. If you have any questions, feel free to reach out to us via the ‘Contact Us’ button in the bottom left-hand corner of your charts!