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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
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Bulkowski's Descending Broadening Wedges

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Candles Chart
Small Patterns
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 12/14/2018
24,101 -496.87 -2.0%
9,514 -158.63 -1.6%
758 -1.70 -0.2%
6,911 -159.67 -2.3%
2,600 -50.59 -1.9%
Tom's Targets    Overview: 12/14/2018
25,000 or 23,500 by 01/01/2019
10,100 or 9,000 by 01/01/2019
740 or 775 by 01/01/2019
7,300 or 6,700 by 01/01/2019
2,700 or 2,525 by 01/01/2019

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

Statistics updated: 7/6/2018

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 98 to 114.

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Descending broadening wedges are mid list performers, found most often with upward breakouts in a bull market. Downward breakouts are rare. As with other broadening patterns, partial rises and declines predict the breakout direction. Partial declines work particularly well, but are difficult to distinguish from the pauses that normally occur as price bounces from trendline to trendline.

Descending broadening wedge chart pattern appears
Descending Broadening Wedge

Important Bull Market Results for Descending Broadening Wedges

Overall performance rank for up/down breakouts (1 is best): Not ranked
Break even failure rate for up/down breakouts: 15%/28%
Average rise/decline: 41%/14%
Throwback/pullback rate: 61%/64%
Percentage meeting price target for up/down breakouts: 83%/39%

The above numbers are based on over a thousand perfect trades. See the glossary for definitions.

Descending Broadening Wedge Identification Guidelines

Price trendCan be up or down leading to the pattern.
ShapeA megaphone tilted down.
TrendlinesBoth trendlines slope downward.
TouchesAt least two peaks and two valleys should touch their respective trendline, but it's best if the pattern has a least five touches (three or more touches of one trendline, two or more of the other).
Volume trendTrends upward.
Reversal/continuationThe chart pattern acts as a reversal of the prevailing price trend (the trend before the pattern began compared to the breakout direction) 58% of the time.
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Descending Broadening Wedge Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation
Measure ruleFor upward breakouts, use the highest peak (A) in the chart pattern as the target. For downward breakouts, compute the difference between the highest peak (A) and the lowest valley B in the chart pattern to get the height. Multiply the height by the above "percentage meeting price target" and then subtract it from the lowest valley (B) to get a price target.
Intraformation tradeShort at the top (1) when price heads down. Cover at the bottom trendline (2). Do not buy at the bottom because of the down-sloping trend tends to cut profits short.
Buy at 3rd touchWhen price touches the bottom trendline for the third time (see point 3) and begins rising, buy. Price may breakout on the following trip across the chart pattern.
Short at the topWhen price touches the top trendline (1) and begins falling, sell or sell short.
Partial riseA partial rise works just 33% of the time, so don't rely on it.
Partial declineA partial decline works 79% of the time
Price trendFor upward breakouts, the best performing patterns are those with a long-term (more than six months) rise leading to the pattern.
Yearly lowFor both breakout directions, the best performing are those with breakouts within a third of the yearly low, but the results are close.
Volume trendDownward breakouts show no performance difference. Upward breakouts show better post breakout performance when volume trends downward throughout the pattern.
BreakoutThe breakout direction is upward 72% of the time.
Throwbacks and pullbacksThrowbacks hurt post breakout performance but pullbacks help.
Adam & Adam double top measure rule
The Measure Rule
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Descending Broadening Wedge Example

Descending broadening wedge chart pattern example

The above figure shows an example of a descending broadening wedge chart pattern. The formation begins at point A. This long and loose descending broadening wedge is typical for this chart pattern type. A partial decline forms at B, and that might be the only redeeming feature of this chart pattern. However, price breaks out upward and reaches the target within a week of the breakout. The target appears as the dashed green line on the chart.

-- Thomas Bulkowski

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Other Descending Broadening Wedge Examples

See Also

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners. If a train station is where a train stops, what is a workstation?