Wedge Pattern Definition

A wedge pattern is a chart formation where price consolidates between two converging trend lines, signaling a potential breakout.

What is a Wedge Pattern?

Rising wedges are often considered bearish, while falling wedges are often considered bullish, though context matters.

Traders watch for a decisive break above or below the converging lines to confirm the pattern.

Price making higher highs and higher lows that converge into a narrowing rising wedge may signal an approaching reversal.

A weighted average assigns different levels of importance to individual values based on a specific factor, such as size or volume.

A whipsaw is a rapid price movement in one direction followed quickly by a sharp reversal, often triggering losses for trend-following traders.

Working capital is the difference between a company's current assets and current liabilities, reflecting its short-term financial health.