Loading page... Loading page...

Forex Chart Patterns

Trading ConceptsTrend Continuation PatternsTrend Reversal Patterns

Triangle (Ascending)

Triangle (Descending)

Triangle (Symmetric)

Rectangle (Bullish)

Rectangle (Bearish)

Forex Flag

Pennant

Forex Wedges

Rectangle (Bearish)

The rectangle graphical price pattern serves for existing trend confirmation. The bearish version is usually formed in a downtrend and signals the trend’s direction will prevail after its occurrence on the chart.



Formation

The rectangle pattern is characterized by two parallel trendlines representing support and resistance levels respectively connecting the most recent lows and highs of the price, holding a certain bunch of price fluctuations within.




Interpretation

The price falling below the support line (plus certain deviation is possible) is considered a sell signal as the level at which the asset has been repeatedly bought is finally overcome.



Target price

Following a bearish rectangle pattern formation the price is generally believed to fall at least to its target level, calculated as follows:


T = S – H,


Where:

T – target price;

S – support level (pattern’s low);

H – pattern’s height (distance between support and resistance).

 

NetTradeX & MetaTrader 4
Trading platforms for PC,
Android and Mobile phones
Learn more
Trading instruments
Forex and Metals
--------------
Other instruments (coming soon)
Learn more