Price Target: The price target is usually determined by measuring the height of the pattern at its widest point and subtracting that value from the breakout level.This minimizes potential losses in case the pattern fails and the price reverses into an uptrend. Stop Loss: A stop loss is generally set just above the last high within the pattern.The breakout point below the lower trendline serves as the entry point.

Entry Point: Once the pattern is confirmed, traders often enter a short position.A declining volume during the formation of the wedge can serve as additional confirmation. This typically comes in the form of a price breakout below the lower trendline. Confirmation: Before entering a trade, the trader or investor will wait for confirmation.

The pattern usually forms during an uptrend. A trader or investor would look for converging, upward sloping trendlines with higher highs and higher lows.