Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Long-Term Rectangle on AUD/USD Chart

April 28, 2013 (Last updated on May 22, 2013) by

The Australian dollar has been consolidating since 2011 on its weekly chart. Now a definite and clear rectangle pattern has formed with the first bar positioned back in July 2012. It has multiple touches of both upper and lower borders. The rectangle (or horizontal channel) may turn out to be either a reversal or continuation pattern. Since this one is following a pretty rough sideways trading period, both bearish and bullish breakouts may be considered for entry.

With my disastrous performance record for 2013 (5 losses out of 5 trades so far), I would not recommend anyone follow my trades other than for the purpose of entertainment, but anyway I feel compelled to share my trade setups, just for history. The chart below shows the rectangle outlined by the yellow lines. Entry (cyan) and take-profit (green) lines are placed at 10% and 100% rectangle’s height from the borders; they were plotted using ChannelPattern script. Stop-loss will be set to breakout bar’s high/low (depending on breakout direction) or the previous bar’s if the former is positioned mostly outside the channel.

AUD/USD Rectangle on W1 Chart as of 2013-04-28

You can download my MetaTrader 4 chart template for this AUD/USD pattern. You may also use my free Chart Pattern Helper EA to trade this pattern.

Update 2013-05-09 21:44 GMT: Short position triggered about three hours ago with entry at 1.01045, SL at 1.03078 and TP at 0.97018.

Update 2013-05-22 15:11 GMT: My sell position has reached its target level of 0.97006 and closed at 14:39 GMT today. Quite a nice breakout scenario.

If you have any questions or comments regarding this rectangle on AUD/USD chart, please feel free to submit them via the form below.

4 Responses to “Long-Term Rectangle on AUD/USD Chart”

  1. Jacek

    Don’t worry about your losses, one good trade will cover it all :)

    Reply

    admin Reply:

    That’s what I am waiting for :).

    Reply

  2. Jacek

    Very good trade. Trading weekly charts and it took just two weeks for price to reach the target.

    Reply

    admin Reply:

    Yes, this one is a classic breakout trade.

    Reply

Leave a Reply

required
required (will not be published)