A falling wedge looks bad at first glance — the price is sliding lower. But the slide is losing steam in a very specific way, and that's the tell: this pattern usually resolves with a breakout UP. Here's how to recognize a real one, how to trade it, and how often it has actually worked.
A falling wedge is a decline that's running out of energy. The price is still making lower highs and lower lows, but each leg down travels less than the one before it — so the line across the tops and the line under the bottoms both slope down AND squeeze toward each other, like a funnel tilted downhill.
That narrowing is the message. Sellers are still in charge, but they're accomplishing less with every push. When the selling finally dries up, even modest buying is enough to snap the price up through the upper line — which is why a falling wedge, despite pointing down, usually resolves upward.
You'll find it either as a pause inside a bigger rise (the healthiest kind — a pullback that keeps shrinking) or at the tail end of a long decline, where it can mark the turn (a “reversal”).
Checking a chart by hand? All four of these need to be true:
The classic mistake is mistaking a falling CHANNEL for a falling wedge. If the two lines run parallel — the price just sliding down a corridor — nothing is being squeezed, and there's no spring being loaded. The wedge needs the pinch.
We run the falling wedge over years of daily history for hundreds of stocks, simulate every trade with the exact rules this guide teaches, and publish what happened — winners, losers, and the average result. The numbers refresh after every nightly scan.
Read them as odds across many trades. A single falling wedge proves nothing; a thousand of them, traded with small losers and measured winners, is where the edge shows up.
Historical results of the simulated strategy described above (1986-12-19 – 2026-06-10), refreshed nightly — not a prediction. How we test →
The stocks with the strongest historical hit rate for this pattern in our backtest (minimum sample applied).
| Stock | Win rate | Avg return | Trades |
|---|---|---|---|
| APTVAptiv | 88.9% | +0.71R | 9 |
| KIMKimco Realty | 82.9% | +0.97R | 35 |
| AIZAssurant | 80.0% | +1.08R | 15 |
| HSICHenry Schein | 80.0% | +1.31R | 25 |
| KHCKraft Heinz | 80.0% | +0.82R | 10 |
| AEEAmeren | 78.9% | +1.70R | 20 |
| CRMSalesforce.com | 78.6% | +1.20R | 14 |
| NRGNrg Energy | 78.6% | +0.81R | 15 |
| IRMIron Mountain | 78.3% | +0.92R | 23 |
| GLWCorning | 77.4% | +0.72R | 31 |
Our screener re-draws these lines on 500+ stocks every night and flags each chart that fits the checklist above. Here's what its latest scan found.
84 fresh falling wedges formed in the last 45 days across the 500+ stocks we scan (569 charts tracked for this pattern in total). Scan updated Jul 2, 2026.
A real falling wedge from the latest scan — detected 2026-07-02 on EOG. Live chart, live lines.
83 more live falling wedge setups — every chart, breakout level, and target.
Everything below comes from rules we've tested on thousands of historical trades. Tap through the three steps to see each one drawn on the chart.
The wedge's upper line — the one capping every bounce — is your trigger. Set your order at that line in advance, so you're in the moment the price pushes up through it. If the stock opens the day already above the line (it “gapped” overnight), your buy happens at that morning's opening price. Don't wait for the big breakout day to close and buy then: across roughly 54,000 backtested pattern trades, buying at the line won just as often and made about 28% more overall, purely from the better price.
Right before the breakout, the price puts in one final low (the “swing low”). If the price later drops back below that low, the wedge has failed — get out. It's a fixed spot you choose BEFORE buying, so the failed case costs a small, known amount. Every stat on this page is measured against this exit.
Measure the wedge's height at its widest point — the gap between the two lines where the pattern began — and project that distance up from the spot where the price broke out. That's the measured-move target our screener draws on the chart, and for wedges it's where the trade takes its win. (The let-it-ride treatment we use on pennants didn't test better here — wedge bounces are more prone to fading after the target, so we bank it.)
Set your order at the line in advance — you're in the moment price pushes through, not at the day's much higher close.
Bullish — usually. It's one of the few patterns where a falling price is a reason for optimism, because the fall is visibly decelerating. In our backtest (the live numbers above), falling wedges that broke upward followed through more often than not.
Now the honest part most guides skip: some falling wedges break DOWN. When that happens, don't shrug it off — a pattern that was supposed to bounce and didn't is telling you the sellers are stronger than they looked. Our in-app coach flags those as notably bearish turns, and the safety exit below is what keeps you out of the argument.
Completed falling-wedge trades from our nightly test — wins and losses, real dates, real results. Each links to that stock's live chart.
Wedges tilt; triangles don't. That one detail changes the lean of each pattern:
The mirror image: both lines slope UP but the climb keeps shrinking — a rally running out of gas. It leans bearish, breaking down about as reliably as the falling wedge breaks up.
Also points down, but its FLOOR is flat — the same price keeps catching every drop. In a falling wedge both lines fall; the flat floor is what makes the triangle its own (bearish-leaning) animal.
A tiny, fast squeeze that only counts right after a sharp run UP. A falling wedge is bigger, slower, and forms while the price is falling.
Educational content, not investment advice. Backtest statistics are historical results of a simulated strategy, refreshed nightly — they describe the past, not the next trade.