A falling wedge is a pattern composed of two trending lines. These two lines will be converging over time and the price pattern between them will be shrinking. The price must touch the trend lines for at least a minimum of 5 times to form a falling wedge. The trend can be either bearish or bullish. This pattern is mainly a reversal pattern but can also be seen as a continuation pattern in a bullish trend. The reversal or continuation occurs when the price closes outside of the trend line. You can use your indicators also to help confirm the breakout. Falling wedges can occur on all time frame charts but are most effective when developed over at least a 4 week period. All of our pattern recognition’s are solely based upon the year chart. The following are varying examples of falling wedges.