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The Rectangle is one of the most popular and easy patterns that is used in the technical analysis. Though being a rather simple pattern, it is a quite important and strong figure that is a very obvious sign of a trend continuation. After noticing it, a trader gets an opportunity to place a potentially profitable order.

In other words, the Rectangle signals a sort of a pause in a trend, indicating price consolidation before a jump towards the unfolding trend. This pattern is formed when the market is trading sideways.

The pattern looks similar to another figure of the technical analysis – the Flag. However, the Rectangle has horizontal support and resistance lines, and there is no flagpole in it. Prices move inside the pattern between two parallel lines. Two vertical lines can be drawn in order to complete the figure, but it is not necessary as they do not play any significant role.

It is important to pay attention to the fundamental components. Formation of the Rectangle often precedes publication of some important news the result of which is hard to be predicted. If the published data coincides with forecasts, then prices usually move with the previous bias.

It often happens that prices break in the direction of the previous trend. That is why the Rectangle is defined as a continuation pattern. However, sometimes prices break the pattern and move in the opposite direction. In that case the Rectangle becomes a reversal pattern. It may happen after macroeconomic statistics do not match forecasts.

It is quite easy to distinguish the Rectangle on a chart. It looks as a small trading channel or a sideways trend. The figure indicates that bears and bulls reached parity. Until a support or resistance line is broken, the Rectangle signals continuation of a trend.

If the Rectangle appears in the bullish market, then prices break upwards and such a figure is called the Bullish rectangle. If it occurs in the bearish market and prices break downwards, then the figure is called a bearish Rectangle.

Actual patterns

Triple Top
сформирован 29.03 в 23:35:32 (UTC+0)
сила сигнала 1 из 5

Triple Top #Bitcoin M5

The Triple Top pattern has formed on the chart of the #Bitcoin M5 trading instrument. It is a reversal pattern featuring the following characteristics: resistance level 50, support level -21012

The M5 and M15 time frames may have more false entry points.

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Inverse Head and Shoulder
сформирован 29.03 в 22:00:17 (UTC+0)
сила сигнала 2 из 5

Inverse Head and Shoulder #Bitcoin M15

According to the chart of M15, #Bitcoin produced the pattern termed the Inverse Head and Shoulder. The Head is fixed at 81609.29 while the median line of the Neck

The M5 and M15 time frames may have more false entry points.

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Double Top
сформирован 29.03 в 20:55:27 (UTC+0)
сила сигнала 1 из 5

Double Top #Bitcoin M5

The Double Top reversal pattern has been formed on #Bitcoin M5. Characteristics: the upper boundary 82648.20; the lower boundary 81609.29; the width of the pattern is 103086 points. Sell trades

The M5 and M15 time frames may have more false entry points.

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