I've noticed that many people get confused with the descending wedge, even though it's one of the most reliable reversal patterns. Let's understand what's happening on the chart here.

This is a bullish pattern formed by two converging trendlines pointing downward. Inside the wedge, you can see how the price makes increasingly lower highs and lows — compressing like a spring. Trading volume usually decreases during this time because the market is waiting for something. When the price breaks above the upper boundary of the wedge, it's a signal for a reversal upward.

In practice, a descending wedge works like this: enter when the candle closes above the upper line, with volume being higher — this confirms the breakout. Place your stop-loss just below the last low inside the wedge. The first target is the height of the wedge projected upward from the breakout point. The second target is the nearest resistance zone above.

I've seen this pattern trigger on hourly and daily charts. The key is to wait for a genuine breakout with volume, not a false move. Descending wedges often offer good risk-to-reward ratios because the stop is quite tight, while the target is far away.

If you see this pattern on a chart, it's worth paying attention. Leave a comment with which patterns you like the most — I’m curious to know which ones you catch best!