On 1 hour GbpChf example- sideways, rectangle, box or ranging price action- do not trade this. This is where a lot of money is lost by retail traders.
Now the rectangle is not a reversal pattern like the previous entries on this list. Instead, it is a continuation pattern, which means that it is generally used by traders to confirm whether or not a particular trend should go on.
You can either find a bullish rectangle or a bearish rectangle depending on the circumstances that create them. For example, you will find a bullish rectangle during an upward trend and a bearish rectangle during a downward trend.
It essentially depicts a trading area where the bulls and the bears compete with each other where they bulls push the price up when the price nears support. The bears move the price down when the price approaches resistance.
Look to trade either:
Breakouts or Breakouts and then pullbacks to enter any new trades.
Chart example showed a 1:2 or 1:3 risk reward setup. Be picky and be patience in the FX trading world.
Now the rectangle is not a reversal pattern like the previous entries on this list. Instead, it is a continuation pattern, which means that it is generally used by traders to confirm whether or not a particular trend should go on.
You can either find a bullish rectangle or a bearish rectangle depending on the circumstances that create them. For example, you will find a bullish rectangle during an upward trend and a bearish rectangle during a downward trend.
It essentially depicts a trading area where the bulls and the bears compete with each other where they bulls push the price up when the price nears support. The bears move the price down when the price approaches resistance.
Look to trade either:
Breakouts or Breakouts and then pullbacks to enter any new trades.
Chart example showed a 1:2 or 1:3 risk reward setup. Be picky and be patience in the FX trading world.