Rectangle
a.k.a. Rectangle pattern
A chart pattern where price bounces between flat support and flat resistance, forming a box.
In plain English
A chart pattern where price bounces between flat support and flat resistance, forming a box.
A rectangle forms when price keeps hitting the same ceiling and the same floor, drawing a box on the chart. It is a range with clean edges: buyers and sellers are deadlocked.
Traders wait for price to break out of the box, often treating the height of the rectangle as a rough guide to how far the breakout might travel. Rectangles in the middle of a trend are usually seen as continuation patterns.
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