Prior Trend: To qualify as a reversal pattern, there must be a prior trend to reverse. Ideally, the falling wedge will form after an extended downtrend and mark the final low. The pattern usually forms over a 3-6 month period and the preceding downtrend should be at least 3 months old. Upper Resistance Line: It takes at least two reaction highs to form the...
Just like the rising wedge, the falling wedge can either be a reversal or continuation signal. As a reversal signal, it is formed at a bottom of a downtrend, indicating that an uptrend would come next. As a continuation signal, it is formed during an uptrend, implying that the upward price action would resume. Unlike the rising wedge, the falling wedge is a...
What Is the Inverted Hammer Candlestick? The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential bullish reversal pattern. What happens on the next candle after the Inverted Hammer pattern is what gives traders an idea as to whether or not prices will go higher or lower. What Does the Inverted...