A Rule-Based Detector for Rising and Falling Wedge Breakouts
Summary
This indicator description explains how to detect rising and falling wedges with reproducible geometric rules. It anchors boundaries to the latest confirmed swing highs and lows, then checks minimum height, positive width, actual narrowing, minimum contraction, a future apex, and a permitted duration. Swing confirmation requires bars on both sides of a candidate, so pivots are delayed but do not subsequently move. Using only the latest two swing points on each side is a deliberate constraint: some shapes that a chart reader might identify will not qualify.
A wedge becomes a signal only when price crosses its slower-moving boundary on a fresh close. Optional filters check the EMA trend, breakout volume, and breakout candle size. The indicator projects a measured-move target from the widest wedge height and uses the opposite boundary as a stop reference. These levels describe geometry rather than assured outcomes. The document gives parameter defaults and chart behavior, but no independent backtest or win-rate evidence; it cautions that reliability varies across instruments and timeframes.
Key ideas
- Confirmed swing points define the two wedge boundaries, with a delay that prevents pivots from moving afterward.
- Six geometric gates screen candidate patterns for size, narrowing, convergence, apex timing, and duration.
- A signal requires a fresh close beyond the slower-moving boundary of the wedge.
- EMA, volume, and breakout-candle-size checks can optionally filter signals.
- Targets use the widest wedge height as a measured move, while the opposite boundary supplies a stop reference.
- The described rules do not establish profitability, and wedge behavior may vary by instrument and timeframe.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.