Continuation patterns
Rectangle
No built-in bias
A horizontal range between parallel support and resistance inside an existing trend.
What a rectangle tells you
A pause rather than a reversal. In an uptrend it usually resolves up, in a downtrend usually down — but the range itself is tradeable in both directions until it breaks.
Why it forms
A balance between buyers and sellers while the market digests the previous move.
How traders enter it
Entry on the break of either boundary with the range height as an objective, or fading the edges while the range holds.
How it fails
Ranges narrow and widen unpredictably, and the first break out of a long range fails often enough that many traders wait for the retest.
That last section is the one worth rereading. A pattern is only useful because it comes with a level that proves you wrong — without one you have a shape and a hope.
People also ask
Is a rectangle bullish or bearish?
Neither. A rectangle has no directional bias built into it — it describes a change in volatility, not direction. The break decides.
How do you trade a rectangle?
Entry on the break of either boundary with the range height as an objective, or fading the edges while the range holds.
When does a rectangle fail?
Ranges narrow and widen unpredictably, and the first break out of a long range fails often enough that many traders wait for the retest.
Can ChartLens spot a rectangle for me?
Yes. Photograph or screenshot any chart and ChartLens names the pattern if it is clearly formed, with a confidence level and whether it is forming, confirmed or failed — and says nothing if it is not there.
Last updated .