The Wedge

A wedge refers to a shape or pattern that narrows over time, often used in technical analysis to predict potential price movements in financial markets. It typically appears as two trendlines converging, with price movement contained within the boundaries. There are two main types: rising wedges, which often signal a potential reversal or decline, and falling wedges, which may indicate an upcoming breakout or upward movement. Traders watch these patterns closely to identify possible changes in trend direction and make informed decisions based on the pattern's breakout point.