Triangle formations are bounded by two lines, each of which points in a different direction -- up, down, or horizontally. With wedge formations the two lines move in the same direction -- up or down. Another important difference is that with wedge formations we know in advance the most likely direction the formation will resolve. Wedges are, in my opinion, some of the most reliable chart patterns for predicting market direction.

ASCENDING WEDGE

With the ascending wedge the two boundary lines move upward with the lower line having the steepest angle of ascent. This formation will normally resolve downward because the steepest angle of ascent is usually the least sustainable. The chart below has two excellent examples.

DESCENDING WEDGE

The descending wedge is the opposite of the ascending wedge. The two boundary lines move downward and the upper line has the steepest angle of descent. This formation will normally resolve upward because the steepest angle is usually the least sustainable. The chart of the U.S. Dollar Index below has a good example marking an important low.