Falling and Rising Wedge Patterns

by bug man, 5344 days ago

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A Wedge is a technical chart pattern that is composited of two converging lines that connect peaks and troughs.
Wedges and triangles are both formed by two trendlines, the difference between these two chart patterns is that a triangle, whether it is an ascending or descending triangle, contains an horizontal line, while wedges does not.

The wedges are of two types, rising and falling wedges.
In a rising wedge, the first trendline connects higher highs and therefore is heading up, whereas the second trendline connects higher lows and it is also heading up.
In the case of a falling wedge, the first trendline connects lower highs, whereas the second line connects higher lows; both lines are heading down.

Wedges could be considered as short-lived breaks in price trends. Technical traders are bullish when the asset price breaks above the first line of a falling wedge and are bearish when the asset price beaks below the second line of a rising wedge.

Wedges signals are downloaded from the Finviz website and are stored in a custom database. The data can be accessed using the "GetData" function.
Example:
buy = GetData("pattern_wedges", "wedge_up", Zero);

The above formula can be used in a trading system to buy stocks with a rising wedge pattern.

Chart pattern signals:
Head and Shoulders Pattern item gets a list of U.S. stocks whose price are forming a head and shoulders pattern.
Chart Patterns: Double Top and Double Bottom item gets several reversal patterns: double top, double bottom, multiple top and multiple bottom.
Ascending and Descending Triangle Patterns object returns ascending and descending triangle pattern signals.