<p><strong>Falling Wedge</strong> is a bullish chart pattern characterized by two converging downward trendlines, forming a wedge shape. The pattern begins with a peak, followed by a series of lower highs and higher lows, creating the wedge. The pattern is considered complete when the price breaks above the upper trendline.</p>
<p>Falling wedges matter as they signal a potential reversal from a downtrend to an uptrend. Traders often use this pattern to enter long positions, expecting the price to continue moving upwards after the breakout. For example, in a falling <a href="/NewSite/encyclopedia/wedge-pattern/" class="ency-link">wedge pattern</a> on a stock's chart, a trader might buy the stock once it breaks above the upper trendline, anticipating a bullish trend.</p>