Consolidation Patterns - Forex Breakout Indicator

With consolidation chart patterns the market can move in any direction after a forex price breakout. Consolidation patterns are used to identify break-out patterns in forex charts. There are 2 types of consolidation patterns that form on forex charts:

• Symmetric Triangles - Consolidation Patterns
• Rectangle Patterns - Range Chart Patterns

Symmetrical Triangles - Consolidation Patterns - Forex Breakout Strategy

Symmetrical triangles are forex patterns with converging trend lines that form a forex price consolidation period that signals there is going to be a price breakout in one direction after this forex chart pattern breaks out in one direction. The forex buy signal from a consolidation triangle is the upside forex price break, while a downside forex price break is a forex sell signal. Ideally, a the forex price breaks out from a forex consolidation chart pattern prior to reaching the apex of the triangle.

Forex Trend lines forex trend lines can be drawn connecting the lows & highs of the consolidation pattern for the price, the trend lines formed are consolidation and converge to form an apex - consolidation triangle pattern. A forex price break out should occur somewhere between 60% - 80% into the triangle consolidation pattern. An early or late forex break out is more prone to forex trading whipsaws, and therefore less reliable. After a forex price breakout to one side the apex of the consolidation triangle forms the support and resistance levels for the forex price. Forex price that has broken out of the consolidation chart pattern should not retrace past the apex. The apex is used as a stop loss setting level for the open forex trades placed after a forex price breakout.

When consolidation forex patterns form we say that the forex market is taking a pause before deciding the next direction to take - this also signals an impending forex price breakout - Forex Breakout Strategy Technical Indicators - Indicator To Confirm Breakout.

These forex consolidation patterns form when there is a tug of war between buyers and sellers and forex market can't decide which way to continue.

Consolidation Patterns - Forex Breakout Strategy Indicators

However, this consolidation pattern can not go on forever - the forex chart examples below shows how the consolidation pattern eventually had a price break out and moved in one direction.

Forex Breakout Indicator - Forex Breakout Signal Technical Indicator

Forex Breakout Indicator - Technical Indicator To Confirm Breakout - Forex Breakout Signal Technical Indicator

After forex price consolidating, If forex price breaks out the upper line we open forex buy trades, if forex price breaks-out the lower line we open sell forex trades.

Rectangle Chart Pattern - Range Chart Pattern - Forex Breakout Strategy Indicators

A rectangle consolidation pattern is a trading range with narrow forex price action which forms a consolidation period in FX market. The forex trading range is defined by 2 parallel forex trend lines which are horizontal and these indicate the presence of support and resistance levels at this particular area. Range consolidation chart pattern is drawn on a FX chart trading using a rectangle, therefore the name rectangle chart pattern.

For this forex consolidation chart pattern, forex price forms a series of highs & lows that can be connected with horizontal forex trend lines that are parallel to each other. Range consolidation chart pattern forms over an extended period of time giving this forex chart pattern its rectangle shape.

A forex breakout of forex price action from this rectangle consolidation chart pattern occurs when either of the horizontal line is penetrated & forex trading range of this rectangle forex pattern is broken. An upside forex price break out is a buy signal. A downside forex price break-out is a sell signal.

Range Chart Pattern - Indicator To Confirm Breakout

Forex Price Breaks Out of the rectangle consolidation range after a period of time & price continues to move upward after an upward forex price breakout.

Forex Breakout Strategy Indicators - Indicator To Confirm Breakout