A technical chart formation created when price action narrows between two converging trendlines that both slope either upward (rising wedge) or downward (falling wedge). The pattern reflects a battle between buyers and sellers with decreasing volatility, and the eventual breakout direction typically contradicts the slope of the wedge. Wedge patterns are found in both continuation and reversal contexts and are confirmed when price breaks through one of the trendlines with increased volume.
Example
“The analyst identified a rising wedge pattern on the 4-hour chart and waited for a confirmed close below the lower trendline before entering a short position.”