Rectangle (a trading range)
Quick answerA rectangle is price bouncing between a flat ceiling and a flat floor. A close outside either side is the breakout, and the range's height is the classic target.
The details
The shape
Two flat lines: a ceiling where sellers keep stepping in and a floor where buyers keep stepping in. Price bounces between them until one side gives up.
Trading it
- Entry on the close outside the range.
- Stop back inside the range, past its middle or its far side.
- Target the range's height from the breakout (stops and targets).
Mark the range in Find Better Charts with a box or two levels, and turn on key levels to see which ones the market already watches.
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