Consolidation Commodity Trading Patterns

With consolidation commodities trading chart patterns the commodity market can move in any direction after a commodities price break-out. Consolidation commodity patterns are used to spot break-out patterns in commodity charts. There are two different types of consolidation commodity chart patterns that form on commodity charts:

• Symmetric Triangles - Consolidation Commodities Trading Chart Patterns
• Rectangles - Range Commodities Trading Chart Patterns

Symmetrical Triangles Commodity Trading Pattern

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

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

When commodity trading consolidation patterns form we say that the commodities trading market is taking a break before deciding the next direction to take - this also signals an impending commodities price breakout - How to Trade Breakout Patterns in Commodity Trading - How to Identify Breakout Commodity Trading Pattern - Break-out Strategy Commodities.

These commodity trading consolidation patterns form when there is a tug of war between buyers and sellers and the commodities trading market can not decide which way to move.

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However, this consolidation commodity chart pattern cannot go on forever and just like in a tug of war one side eventually wins, the commodity chart examples below shows how the consolidation commodity pattern eventually had a commodities price breakout & moved in one direction.

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

Rectangle Commodities Trading Chart Pattern

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

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

A commodity trading breakout of commodities price action from this rectangle consolidation commodity pattern forms when either of the horizontal line is penetrated and the commodity range of this rectangle commodity pattern is broken. An up side commodities price breakout is a buy commodity signal. A downside commodities price breakout is a sell commodities trade signal.

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Commodities Price Breaks Out of rectangle consolidation range after a period of time & commodities price continues to move upwards after an upward commodities price breakout.

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