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Rectangle Pattern Breakout Checklist

The document outlines the rules for entering long and short positions based on rectangle pattern breakouts and breakdowns, emphasizing the importance of volume and price action. For long positions, entry is above the breakout candle's close with a stop loss below its low, while for short positions, entry is below the breakdown candle's close with a stop loss above its high. Probability enhancers include the duration of price stability between horizontal lines, increased volume during breakouts, and the absence of opposing zones.

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6 views2 pages

Rectangle Pattern Breakout Checklist

The document outlines the rules for entering long and short positions based on rectangle pattern breakouts and breakdowns, emphasizing the importance of volume and price action. For long positions, entry is above the breakout candle's close with a stop loss below its low, while for short positions, entry is below the breakdown candle's close with a stop loss above its high. Probability enhancers include the duration of price stability between horizontal lines, increased volume during breakouts, and the absence of opposing zones.

Uploaded by

bishnumalijob
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

RECTANGLE PATTERN BREAKOUT

Rules for Long Positions:


● Price Should be stuck in a Narrow Range Between Two
Horizontal Lines.
● Breakout of Rectangle Pattern Should Happen with the Increase
in Volume.
● There should not be any opposite Reaction in the Breakout
Candle (Selling Pressure in Breakout Candle).
● Price should be coming from HTF DZ
● Entry will be just Above the Close of Breakout candle.
● Stop Loss will be Below the Low of Breakout candle.
● We should get minimum RR of 2:1 till Opposing HTF SZ

Rules for Short Positions:


● Price Should be stuck in a Narrow Range Between Two
Horizontal Lines.
● Breakdown of Rectangle Pattern Should Happen with the
Increase in Volume.
● There should not be any opposite Reaction in the Breakdown
Candle (Buying Pressure in Breakdown Candle).
● Price should be coming from HTF SZ
● Entry will be just Below the Close of Breakdown candle.
● Stop Loss will be Above the High of Breakdown candle.
● We should get minimum RR of 2:1 till Opposing HTF DZ
Probability Enhancers for both Long and Short Position:
● Longer the price is intact between 2 Horizontal lines (Resistance
& Support) & more often it is successfully tested, the more
important and reliable it becomes.
● Plan deeper Entry if we are not getting minimum RR of 2:1 till
opposing HTF zone.
● Price halts before the Breakout/Breakdown candle.
● Volume increased in the Breakout/Breakdown candle is more as
compared to many previous candle’s volumes.
● Confluence of any Price Action Concept
● There is no Strongest LTF Opposing Zone

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