Rectangles & Trading Ranges
A rectangle is a trading range: price bouncing between horizontal support and resistance, going nowhere while buyers and sellers reach a stand-off. This article explains the range as a box, the two ways to trade it (fading the edges within, and trading the breakout beyond), why a rectangle can resolve as either a continuation or a reversal, the role of volume, the measured-move target, and the false breakouts that ranges are notorious for.
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