Rising/Falling Wedge

Install and import#

bash

npm install fintech-algorithms

import { detectRisingFallingWedge } from "fintech-algorithms/geometric-chart-patterns/continuation-structures/rising-falling-wedge";

Signature#

detectRisingFallingWedge()

Worked example#

executed This entry is a thin wrapper its test never calls directly, so it was invoked with the arguments its shared implementation received. Real output, not asserted against a published figure.

Input#

argument 1

[90, 91.5, 93, 94.5, 96, 97.5]

Showing 6 of 96 elements.

Call#

detectRisingFallingWedge()

Returns#

object with 7 fields: pattern, state, reason, event, events, pivots, parameters

{
  "pattern": "wedge",
  "state": "confirmed",
  "reason": "breakout-confirmed",
  "event": {
    "pattern": "wedge",
    "state": "confirmed",
    "reason": "breakout-confirmed",
    "pivot_indices": [16, 22, 28, 34, 40, 46],
    "pivot_prices": [105, 113, 109, 116, 113, 118],
    "pivot_types": ["low", "high", "low", "high", "low", "high"],
    "candidate_available_index": 48,
    "confirmation_index": 49,
    "breakout_direction": "bearish",
    "expected_direction": "bearish",
    "subtype": "rising",
    "upper_boundary": 118.79166666666667,
    "lower_boundary": 116,
    "metrics": {
      "upper_slope": 0.20833333333333334,
      "lower_slope": 0.3333333333333333,
      "upper_relative_slope": 0.00185459940652819,
      "lower_relative_slope": 0.002967359050445104,
      "upper_intercept": 108.58333333333334,
      "lower_intercept": 99.66666666666667,
      "width_start": 6.916666666666671,
      "width_end": 3.1666666666666714,
      "convergence": 0.5421686746987948,
      "parallel_gap": 0.001112759643916914,
      "impulse": 0.09375,
      "impulse_direction": "bullish",
      "formation_bars": 30
    }
  },
  "events": [
    {
      "pattern": "wedge",
      "state": "confirmed",
      "reason": "breakout-confirmed",
      "pivot_indices": [16, 22, 28, 34, 40, 46],
      "pivot_prices": [105, 113, 109, 116, 113, 118],
      "pivot_types": ["low", "high", "low", "high", "low", "high"],
      "candidate_available_index": 48,
      "confirmation_index": 49,
      "breakout_direction": "bearish",
      "expected_direction": "bearish",
      "subtype": "rising",
      "upper_boundary": 118.79166666666667,
      "lower_boundary": 116,
      "metrics": {
        "upper_slope": 0.20833333333333334,
        "lower_slope": 0.3333333333333333,
        "upper_relative_slope": 0.00185459940652819,
        "lower_relative_slope": 0.002967359050445104,
        "upper_intercept": 108.58333333333334,
        "lower_intercept": 99.66666666666667,
        "width_start": 6.916666666666671,
        "width_end": 3.1666666666666714,
        "convergence": 0.5421686746987948,
        "parallel_gap": 0.001112759643916914,
        "impulse": 0.09375,
        "impulse_direction": "bullish",
        "formation_bars": 30
      }
    }
  ],
  "pivots": [
    {
      "kind": "high",
      "index": 12,
      "confirmation_index": 14,
      "price": 108
    },
    {
      "kind": "low",
      "index": 16,
      "confirmation_index": 18,
      "price": 105
    },
    {
      "kind": "high",
      "index": 22,
      "confirmation_index": 24,
      "price": 113
    }
  ],
  "parameters": {
    "pivot_left": 2,
    "pivot_right": 2,
    "pivots_per_side": 3,
    "max_pattern_bars": 44,
    "max_confirmation_bars": 4,
    "impulse_lookback": 12,
    "flat_tolerance": 0.00045,
    "min_slope": 0.00022,
    "parallel_tolerance": 0.00035,
    "min_convergence": 0.18,
    "min_impulse": 0.055,
    "break_buffer": 0.001
  }
}

Other exports#

This module also exports traceRisingFallingWedge. Every module additionally exports run as an alias of its primary function, and a meta object carrying its catalog id, domain, family, shape and article URL.

Diagrams#

How it works#

This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.

Read the article →

References#

Foundations of Technical Analysis — Andrew W. Lo, Harry Mamaysky, and Jiang Wang
SciPy `find_peaks` — SciPy project
The Probability of Backtest Overfitting — David H. Bailey, Jonathan M. Borwein, Marcos López de Prado, and Qiji Jim Zhu
Applicability decision