Rectangle Pattern Explained

It is a continuation pattern, representing a zone of sideways correction in which horizontal highs and lows are formed. It is considered a pause in price movement before the continuation of the previous trend

Pattern Shape:

Pattern Formation Stages:

Supply and demand forces are balanced in the market, causing the price to move sideways for a period of consolidation
During this period, highs and lows are formed at equal horizontal levels, with no fewer than four touchpoints
Once these highs or lows are broken in the direction of the previous trend, it signals the continuation of that trend

Utilizing the Pattern:

In an uptrend: buy after breaking the resistance area of the rectangle
In a downtrend: sell after breaking the support area of the rectangle

Pattern Target:

Measure the distance between the upper and lower boundaries of the rectangle, then project the same distance from the breakout point

Conclusion:

It is a continuation pattern that reflects a period of consolidation with balanced supply and demand, where price forms horizontal highs and lows before continuing in the direction of the prevailing trend