Forex Chart Patterns – Rectangles Chart Patterns
Posted on 26. Jul, 2007 by admin in Forex Chart Patterns
The rectangle formation is often a very simple one to recognize. It is essentially a market that is trading in a range between two horizontal lines. The rectangle formation represents consolidation of the move that preceded it, creating a foundation for a continuation of a further move in the same direction.
The rectangle formation can be used in either an up trend or a down trend, and although it normally signals continuation of a market move in the direction of the original trend, the important signal is upon the breakout from the rectangle. Reversals are possible in a rectangle pattern if the breakout occurs back towards the origin of the trend that preceded the pattern.
