RECTANGLE CHANNEL PATTERNS

摘要

Markets provide two types of trading activity: Trending and consolidating. Trending periods are obvious as price moves in one direction, up or down, without many interruptions; whereas consolidation periods are indecisive when price fluctuates higher and lower without moving in a certain direction. These consolidation periods can last from a few days to several months and typically trade within a limited range. While consolidating markets don't offer obvious trends, the price balance between bulls and bears leads to the bounded range in which price levels of support and resistance are formed in parallel to each other. This bounded range results in a rectangular channel pattern (or box pattern).