Trading the Wedge Chart Pattern Like a Pro

The speaker provides an overview of the wedge pattern and suggests that it can be considered a reversal or continuation pattern depending on the shape and where it appears.  The falling wedge is created when the market makes lower lows and lower highs within a contracting range and indicates that the market is running out of steam to the downside and that a reversal may be at hand.  He provides a few examples to illustrate his point.

A rising wedge pattern is formed when the market makes higher highs and higher lows within a contracting range.  This pattern indicates that the market is running out of steam.  When found in an uptrend, it can signal a reversal.  Conversely, in a downtrend, the rising wedge could be a consolidation phase which can lead to a continuation of the downtrend.