Rising & Falling Wedges: Spotting Reversal Dynamics & Volume Decay

1. Market Logic: The Slanted Squeeze

Unlike symmetrical triangles, wedges slope in the direction of the prevailing trend while converging:

• Rising Wedge (Bearish Reversal): Higher highs and higher lows converging upward. Demonstrates diminishing buyer momentum; once lower support snaps, price plummets rapidly.
• Falling Wedge (Bullish Reversal): Lower highs and lower lows converging downward. Demonstrates seller exhaustion; upward break leads to powerful short squeezes.

2. Precision Execution Strategy

Entry: On the close outside the wedge boundary with an expansion in volume.
Stop Loss: 2 ticks beyond the highest peak (Rising Wedge) or lowest trough (Falling Wedge).
Target: The origination point (base) of the wedge structure.