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What Makes The Rectangle Chart Pattern So Important? from freemexy's blog
Did you know that the market is stuck in a range most of the time？ In
other words, you will see the rectangle chart pattern 70% of the time.
This leaves trends to form the other 30%. Hence it is important to know
the significance of the rectangle chart pattern.To get more news about WikiFX, you can visit wikifx news official website.
A rectangle can last for as short as a few minutes. Currency traders look for rectangles that last between minutes and days.
Besides varying in duration, rectangle chart patterns also vary in height.
A rectangle is like a base of a building. A larger base will be able to support a larger building. Therefore, a larger rectangle will be able to support a larger price move when prices move beyond the rectangle.
The larger the candles within the rectangle, the longer the pattern stays in a rectangle. The move following the breakout of the taller rectangle tends to be larger. The size of the above rectangle is 45 pips . Price hovered within the rectangle for 2 days and 6 hours before breaking out of the rectangle.
At market lows, banks and large commercial companies will be accumulating (buying) the asset and this can occur within the rectangle pattern.
At market tops, banks and large commercial companies who had bought the currency pair while it was cheap will slowly distribute (sell) to uninformed speculators.
In short, rectangles are a battle between buyers and sellers.
You can find this pattern in all market types. How then, can we trade and profit from this rectangle pattern？
A rectangle can last for as short as a few minutes. Currency traders look for rectangles that last between minutes and days.
Besides varying in duration, rectangle chart patterns also vary in height.
A rectangle is like a base of a building. A larger base will be able to support a larger building. Therefore, a larger rectangle will be able to support a larger price move when prices move beyond the rectangle.
The larger the candles within the rectangle, the longer the pattern stays in a rectangle. The move following the breakout of the taller rectangle tends to be larger. The size of the above rectangle is 45 pips . Price hovered within the rectangle for 2 days and 6 hours before breaking out of the rectangle.
At market lows, banks and large commercial companies will be accumulating (buying) the asset and this can occur within the rectangle pattern.
At market tops, banks and large commercial companies who had bought the currency pair while it was cheap will slowly distribute (sell) to uninformed speculators.
In short, rectangles are a battle between buyers and sellers.
You can find this pattern in all market types. How then, can we trade and profit from this rectangle pattern？
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