Chart from 2/16-
- Consolidation patterns like this one can extend for a few weeks or many months. If the pattern is less than 3 weeks, it is usually considered a flag, which is a continuation pattern.
- Generally, the longer the pattern stays in the box, the more significant the breakout.
- The direction of the next significant move can only be determined after the breakout has occurred.
- The estimated move is found by measuring the height of the rectangle and applying it to the breakout.
- Being patient to enter until the breakout has been confirmed increases the probability of a profitable trade.