Kupach Trading

Bullish Rectangle

BullishContinuationBeginner

A rally pauses in a box. The same top, the same floor, then up and out.

Verdict: SkipBitcoin 4H: 5 trades, won 80%, avg trade +2.4% vs random day +0.6% (too few trades to judge). Backtest

Uptrend
Bullish Rectangle: textbook shape, step by step

It starts with a rally. Then price hits a ceiling and drops back.

step 1/6

Trade rules

DirectionLong (buy)
EntryAfter a prior advance, a candle CLOSE above the top of the range (the higher of the two tops).
Cancelled ifPrice trades below the floor of the range before the breakout.
TargetBox height, projected from the breakout
3 common mistakes
  • Buying inside the box and hoping, instead of waiting for the close above the top.
  • Ignoring the trend before it: a box after a fall is not a bullish rectangle.
  • Expecting more than the box height: the classic target is only one box up.

Backtest

same rules every time · equal size · no fees · method
MarketTradesWonAvg tradeRandom day
Bitcoin · 4H · 2017-2026 · too few trades to judge580%+2.42%+0.60%
US large caps (50) · 1D · 2016-20264043%−2.05%+1.68%

Verdict: SkipLost money on average on US large caps. Bitcoin had too few signals to judge.

pattern −82%random +67%
US large caps (50) 1D: pattern −82% vs random day +67% over 40 trades

Real examples

Bitcoin · 4H

Breakout Feb 5, 2020, exit Feb 10, 2020 (target)+5.37%
Top of the boxFloorUptrend8,238 · Jan 24, 2020Same top9,619 · Feb 3, 2020Same floor9,093 · Feb 4, 2020Breakout
Bitcoin 4H, real candles from Jan 24, 2020

Visa · 1W

Breakout Jun 6, 2019, exit Jul 3, 2019 (target)+5.25%
Top of the boxFloorUptrend121.60 · Dec 19, 2018Same top165.77 · May 22, 2019Same floor156.75 · May 30, 2019Breakout
Visa 1W, real candles from Dec 24, 2018

Disney · 1D

trapBreakout May 8, 2023, exit May 11, 2023 (stop)−6.61%
Top of the boxFloorUptrend93.02 · Mar 24, 2023Same top102.61 · May 1, 2023Same floor96.61 · May 4, 2023Breakout
Disney 1D, real candles from Mar 24, 2023