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Guidelines to trade by using Rectangles

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Guidelines to trade by using Rectangles

In a rectangle, price moves horizontally between overhead

resistance and underlying support


A breakout occurs when price closes outside the boundary of a chart pattern.

Touches There should be at least two touches of each trend line.

Trend lengths

A short-term trend lasts up to three months. An intermediate term

or secondary trend lasts between three and six months. A long-term trend or primary trend lasts longer than six months

Tops have price trending into a chart pattern from the bottom,

and bottoms have price trending into a chart pattern from the top

The price velocity leading to and exiting from a chart pattern are often similar even if the direction is reversed.

Undershoot or overshoot

Both undershoot and overshoot occur before a chart pattern begins. Undershoot happens when price briefly dips below

the entrance of a chart pattern. Overshoot happens when price briefly soars above it.

A rectangle forms because

traders want to own the stock at two fixed prices, one low and one

high, setting limits (for a time) on how far price moves.

Prices trend up to the formation and then

oscillate between two horizontal trend lines

before breaking out upward.

Measure rule

Measure the height of the rectangle from trend line to trend line.

For upward breakouts, add the height to the top trend line; for

downward breakouts, subtract it from the bottom trend line. The

result is the minimum expected move. For a maximum price

target, measure the length of the rectangle and extend it vertically

above the top trend line (for upward breakouts) or below the

bottom one (downward breakouts). The price becomes the

maximum expected move.

Wait before place forex trading signals for breakout Since you cannot be sure in which direction a rectangle will break

out, wait for prices to close outside the trend line before fx trading

in the direction of the breakout.

Tall rectangle scalp If the rectangle is tall enough, sell or sell short near the top trend

line and buy or cover near the bottom one.

Watch for rectangles forming as the corrective phase of a

measured move up formation and adjust the target price

accordingly. Rectangle reversals sometimes appear as flat top


#1 - October 13, 2018, 07:41:54 PM
« Last Edit: February 02, 2019, 04:19:23 AM by Admin »

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I think will a good idea if you inserted the image, for example, it will help to make easier understanding how to create rectangles and how to trades with this method
#2 - February 03, 2019, 01:34:18 PM

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I only use reactangle to detect breakout and indicate high and low prices for resistance and suuport, this tool is very good because it can be a reference in trading, especially using a trading chart system without indicators. thank you

#3 - February 06, 2019, 12:12:49 PM

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This is what it means

Guidelines to trade by using Rectangles in General Forex Discussion_INI
#4 - February 08, 2019, 02:21:22 PM

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trading with recktangle patterns is quite accurate and profitable.
#5 - October 11, 2019, 02:57:27 AM

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The rectangle is a pattern that often occurs in slow-moving or small markets and it can be used to wait for a breakout and take an entry. But the strategy you give should be better if it is accompanied by pictures and with neat writing.
#6 - November 05, 2020, 05:17:11 PM

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good guidelines and I also often observe rectangle patterns but have never applied it to real trading, if you just see traders doing analysis with rectangles, it is often
#7 - November 11, 2020, 04:33:41 PM

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rectangle is a pattern that is quite accurate if traders use it with the right rules and methods because the pattern often represents in estimating price direction.
#8 - November 12, 2020, 01:35:02 AM

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rectangle is an analysis strategy using a conical boundary pattern. in the pattern there will be price movements that just go up and down within the pattern and eventually breakout.
#9 - December 02, 2020, 01:38:40 PM

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good guidelines and hopefully a lot of help for traders who want to learn to use these patterns. but keep in mind that the pattern must be really mastered and valid in determining price movement signals.
#10 - December 02, 2020, 05:38:09 PM

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rectangle is always closely related to breakout, therefore a trader must know the rules for using this pattern in order to use it more accurately.
#11 - December 02, 2020, 06:03:53 PM

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Trading using a rectangle pattern is quite common, but in my opinion, this pattern is only a tool where prices can still make mistakes and do not match the pattern.
#12 - December 10, 2020, 05:32:56 AM

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Rectangle patterns are usually used in the same way as other pop-market patterns so there are certain rules for entry and placing of exits (TP and SL).
#13 - December 24, 2020, 09:00:13 AM

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this is one way trading that is quite impressive and easy because many use it so we can learn and follow it
#14 - May 03, 2021, 11:42:20 PM

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in my opinion this way will be able to work optimally if we combine it with the support and resistance area
#15 - June 03, 2021, 03:14:32 PM


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