Leia mais sobre a RADEX MARKETS
Free margin is the money in your trading account that is not tied up by open positions, leaving it available to open new trades or absorb floating losses. If you use MT4 or MT5, you will see the Free Margin figure changing in the account row as the market moves. The number is easy enough to spot; understanding what it is telling you is where things become less obvious. Is the amount high enough to place another trade? Should you worry when it starts shrinking? And does reaching zero mean the account is about to be wiped out? Those questions matter because free margin performs two jobs at once. It represents your remaining trading capacity, but it is also the financial cushion supporting your existing positions. A trader who watches only the account balance can therefore miss a problem developing in real time. The balance may look perfectly healthy while floating losses quietly eat through equity and free margin underneath it. This guide explains how free margin is calculated and then follows one trade from entry towards stop out, showing how the key account figures change at every stage. It also explains what actually happens when free margin reaches zero, where to find the figure in MT4 and MT5, and whether floating profit can safely be used to add another position. Free margin is calculated by subtracting used margin from equity. It shows both how much capacity remains for opening new trades and how much floating loss the account can still absorb; reaching zero prevents new trades from being opened, but positions are not automatically closed until the margin level reaches the broker’s stop-out threshold. In MT4, the figure appears in the account row of the Terminal; in MT5, it appears in the corresponding row of the Toolbox. Open your RADEX MARKETS trading account today Free margin is the portion of your account equity that remains after the margin supporting your open positions has been deducted. In simple terms, it is the money that is not currently locked away by your trades. It plays two roles at once: it provides the capacity to open new positions and acts as a cushion against floating losses on positions you already hold. Unlike your balance, free margin can change every second while a trade is open. A profitable move increases equity and usually increases free margin, while an adverse move reduces both. You do not need to open, close or adjust a position for the figure to change; ordinary market movement does the job for you. For example, an account can still show the same balance it had when a trade was opened, even though a growing floating loss has substantially reduced its free margin. This is why the balance alone does not reveal how much room an account has left. Free margin gives the more immediate picture because it reflects what is happening to open trades in real time. The part of account equity not reserved as margin for open positions, calculated as equity minus used margin; it is the capacity available for new trades and the cushion that absorbs floating losses. Free margin is both the account’s cushion against floating losses and its remaining capacity to open new trades. Its value becomes much easier to understand when you see how balance, equity, used margin and margin level connect to it. Free margin answers whether the account has enough available funds to open another trade. Margin level answers how close the account is to the broker’s margin-call or stop-out thresholds. They are related, but they are not interchangeable; the dedicated guide to forex margin levels explains the percentage thresholds and account-health grading in more detail. The calculation is built from three short formulas: Required margin = Notional position size ÷ Leverage Equity = Balance + Floating profit or loss Free margin = Equity − Used margin The notional position size must be expressed in the account’s base currency before the margin calculation is completed. Your trading platform normally performs this conversion automatically, which is why the displayed margin requirement can move slightly when exchange rates change. For example, consider a trader opening a 0.10-lot USD/CHF position in a US-dollar account: The trader began with a $1,000 balance, but the $75 floating loss reduced equity to $925. After the $333.33 required margin was deducted, $591.67 remained available to support the position or meet the margin requirement for another trade. With no positions open, used margin is zero, so free margin equals equity. Free margin changes with every movement in the floating profit or loss on an open trade. The following table continues the same $1,000 account and 0.10-lot EUR/USD position. It assumes used margin remains fixed at $366.67 and uses a 50% stop-out level, so the changing relationship is easy to see. On a 0.10-lot EUR/USD position, each pip is worth approximately $1. The $75 loss therefore represents a 75-pip move against the trade, the $500 loss represents 500 pips, free margin reaches zero after roughly 633 pips, and the assumed 50% stop out arrives at about 817 pips. This example ignores spread, commission, swap charges and any recalculation of required margin so that the mechanics remain visible. What counts as a safe margin level is not universal. Above 100%, the account has positive free margin; at 100%, free margin is zero and the account has reached the practical margin-call line. Many traders use 300% or more as a personal buffer target, but that is a risk-management guideline rather than a guarantee of safety. In fact, this example begins at only 272.73%, showing that being allowed to open a leveraged position is not the same as leaving yourself generous breathing room. The dedicated margin-level guide explains how to interpret the percentages in more detail. The separate guide to margin calls and stop outs covers warnings, broker procedures and forced closures; for UK-regulated retail accounts, the FCA’s margin close-out rule requires firms to act when net equity falls below 50% of the required margin. When free margin reaches zero, you cannot open a new position or add exposure, and a pending order that would require additional margin will not execute. It does not mean the account is immediately wiped out. Positions are closed only when the margin level reaches the broker’s stop-out threshold, not simply because free margin has reached zero. For UK-regulated retail accounts trading covered leveraged products, the framework is more specific. Under FCA COBS 22.5, a firm must close open positions as soon as market conditions allow if net equity falls below 50% of the margin required to maintain them. The same rules provide negative balance protection, limiting the retail client’s liability to the funds held in that trading account. This means that if an extreme price gap carries a protected retail account below zero before positions can be closed, the client should not be left owing the broker the shortfall. The protection applies to eligible retail accounts and covered products; clients classified as professional may not receive the same safeguard. This is why traders should confirm both the close-out percentage and account classification in their broker’s terms rather than assuming every margin account works identically. Both MetaTrader platforms display free margin in the account-information row of the Trade tab, and there is nothing extra to download or install. The main difference is the name of the desktop window: MT4 calls it the Terminal, while MT5 calls it the Toolbox. On the mobile app, open the Trade screen and look in the account-information area at the top. MetaTrader’s mobile documentation lists Equity, Margin, Free Margin and Margin Level there, followed by the open positions and pending orders. The precise layout can vary slightly by operating system, screen size and app version, but the field names remain recognisable. MetaQuotes confirms the desktop shortcuts and Trade-tab locations in its official MT4 Terminal guide, MT5 platform guide and MT5 mobile trading guide. In MT5 hedging mode, opening an equal position in the opposite direction can sometimes leave used margin lower rather than higher. Brokers may apply a reduced hedged-margin amount or calculate margin from the larger side of the long and short exposure; if the margin released is greater than the new spread and trading costs, free margin can rise. MetaTrader’s symbol documentation confirms that the method is chosen by the broker, so the effect is not automatic on every account. That increase is not free money or a new safety cushion. An equal hedge largely freezes the existing net profit or loss instead of repairing it, while spreads, commissions and overnight charges may continue to accumulate on both positions. When one side is closed, its result becomes realised and the remaining position is exposed to price movement again, so traders should check the broker’s hedged-margin rules before relying on this technique. There are three practical ways to increase free margin that a trader can directly control, and each one carries a cost or trade-off. A favourable market move may also lift free margin, of course, but hoping that price eventually comes back is not much of a risk-management plan. Adding money increases the account balance and equity, so free margin rises immediately while used margin remains unchanged. The cost is straightforward: more capital from outside the account is now exposed, while the size and underlying risk of the open positions have not been reduced. Closing part of the exposure releases some of the margin reserved to support it, which can increase free margin without requiring a new deposit. If that portion is losing, however, its floating loss becomes realised when it is closed. The account has less exposure afterwards, but the loss has not disappeared merely because its label changed. Trading smaller is the preventative approach. A smaller position requires less margin, leaving more equity free to absorb ordinary market movement and making the account less likely to become stretched in the first place. As the earlier calculation showed, notional position size and leverage determine the initial margin requirement, so reducing the lot size directly reduces the amount locked away. Read more：What Is Leverage in Forex and How Much Should You Use? Floating profit increases equity in real time and therefore increases free margin, which means unrealised profit genuinely can be used as margin for a new position. If an open trade adds $300 to equity, the platform may treat part of that $300 as available capacity even though the original position has not been closed. The danger is that the trader is treating money that has not yet been banked as permanent capital. If the market reverses, the floating profit can disappear while the added position begins losing at the same time. That combination accelerates the fall in both equity and free margin, turning an apparently healthy winning trade into the familiar pyramiding route towards an overleveraged account. A sensible criterion is to treat floating profit as a reward on the screen rather than capital available for immediate reuse. Add to exposure only with funds or profits that have already been realised and only when the enlarged position still fits the account’s original risk limit. The platform may permit more; that does not mean the risk plan should. Read more：10 Forex risk management tips every trader should know Free margin is the money in a trading account that is not pledged against open positions and remains available to use. As the five-term table shows, it serves the dual purpose of funding new trades and absorbing floating losses. Margin is the money reserved to support open positions, while free margin is the money that remains available. Free margin is calculated by subtracting used margin from equity, as shown in the five-term comparison table. Free margin becomes negative when floating losses reduce equity below used margin. New trades and pending orders that require additional margin will not execute, and the account is moving closer to its stop-out threshold, as explained in the three-stage zero-margin section. You can generally withdraw funds that are not locked as margin, subject to the broker’s withdrawal rules and displayed withdrawable balance. However, withdrawing money reduces equity and removes part of the cushion supporting open positions, bringing a stop out closer if the account is already carrying a floating loss. A margin account can be highly risky because leverage allows a trader to control exposure larger than the capital deposited, magnifying losses as well as gains. Free margin is the remaining cushion inside that account, so monitoring it is a basic part of controlling risk; the dedicated margin-trading guide explains the full mechanics. A margin level above 100% means the account still has positive free margin, while many traders use 300% or more as a personal buffer target. This is a guideline rather than a guarantee, and the dedicated margin-level guide explains the grading and broker thresholds in more detail. Free margin is the account’s breathing room: the formula is only equity minus used margin, but its movement reveals how much flexibility the account really has. Check that the figure leaves enough room before opening a trade, watch how quickly it shrinks while the position is open, and remember that exposure can still be reduced before free margin reaches zero. As a practical next step, open one small position in a demo account and watch Balance, Equity, Margin, Free Margin and Margin Level move across the account row. Seeing the relationship update in real time usually makes the mechanics clearer than another page of theory ever could. Lee W. is a seasoned professional trader with over 10 years of experience. Passionate about sharing valuable expertise and unique market insights, Lee W. now serves as an external and independent market analyst for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Deeper into margin: Related concepts:
SHARE A rounded base finishes on your chart, price climbs back towards the old high, and then a small pullback appears on the right-hand side. Is that a handle or the start of another leg down? Every guide tells you to wait for the breakout and check that volume expands, except your platform does not show volume in the way those guides assume. This article fixes the parts that get left out. You get the depth thresholds written as numbers rather than adjectives, the target and the stop worked through in pips, a straight answer on what replaces volume confirmation on a currency pair, and a rule for what to do when the handle breaks down instead of up. A cup and handle is a rounded consolidation base followed by a shallow pullback near the previous high, and it points upward. The trade triggers when price closes above the handle high, and the target is the depth of the cup projected up from that breakout. Open an account with RADEX MARKETS A cup and handle is a continuation pattern that appears after an advance, made of a rounded base followed by a small pullback close to the prior high. Price drifts lower in a curve rather than a spike, works its way back up to the level it fell from, meets profit-taking there, and drops back a short distance before the buyers try again. The shape matters because of what it describes. A curved base means supply was absorbed gradually at improving prices, and the shallow pullback that follows means the sellers who showed up at the old high were not numerous enough to push price far. The pattern was defined by William O'Neil in How to Make Money in Stocks (1988), and its rules were written for equities, which becomes important later. Read more：Forex Technical Analysis: A Step-by-Step Beginner’s Guide The base should round out. A V-shaped low means price fell hard and bounced hard, which is a reaction rather than accumulation, and the recovery tends to run into the same sellers on the way back up. Rounding takes time, because each successive low needs to be met a little higher than the last. That gradual handover from sellers to buyers is the whole point of the shape. The handle forms when price reaches the old high and runs into traders taking profits. It usually drifts down slightly or moves sideways in a small flag. This is the most informative part of the pattern. A shallow, short handle says the selling at the old high was light. A deep or long handle says the opposite, and the setup weakens the further it goes. The pattern points upward, and it only counts when a genuine advance came before it. A rounded base with no prior uptrend is simply a base, not a cup and handle. Upward is the bias, not the outcome. The direction is settled by whether price closes above the handle high, and until that happens the pattern is unfinished. Four patterns share the same broad story of a base followed by a move up, and they are easy to mix up. The entry trigger and the target calculation differ in each case, so naming it correctly changes where you buy and what you aim for. The rounding bottom is the closest relative and the easiest to confuse. It has the same curved base but no handle, which means there is no small resistance level to trade against, so the entry is looser and comes earlier. A double bottom is a different animal despite looking similar from a distance. It has two clearly separated lows with a peak between them, and that middle peak is the level you trade, not a rounded rim. Four things need to be true at once. If any one of them fails, what you have is a base or a pullback, and the measured move that follows does not apply. There must be a recognisable advance before the cup begins, because this is a continuation pattern and the continuation has to have something to continue. As a working rule, look for a run of higher highs and higher lows that is at least as long as the cup you are about to draw. The cup should retrace around one third of the prior advance. In volatile conditions that can stretch to a half, and past a half the pattern loses its meaning because too much of the previous move has been given back. Shape carries more weight than depth. A shallow V is worse than a slightly deep round base. The handle should retrace no more than one third of the advance that formed the right side of the cup, and shallower is better. A close below the handle low voids the pattern outright. The traditional guidance describes the cup in months and the handle in weeks, which comes from equity charts. On a currency pair it is more useful to count candles, because the same shape appears on the daily, the four-hour and the one-hour. Look for a cup spanning roughly 25 to 60 candles with a handle of about 5 to 15, whatever timeframe you are on. A handle that drags on past that range is a warning rather than a detail. It means buyers are not stepping back in, and the longer it lasts the more likely the base fails. Translating the percentages into pips makes them usable. On a 400 pip advance, a cup retracing one third is about 130 pips deep and one retracing a half is about 200. If the right side of the cup climbs 130 pips, the handle should hold within about 43 pips of the high. Almost every guide on this pattern lists expanding volume as a requirement for a valid breakout. That rule was written for stocks, where an exchange publishes how many shares changed hands. Spot forex has no such figure. MT4 and MT5 show tick volume, which counts how many times the quote updated during a candle, not how much was traded. Because the market is decentralised, each broker reports its own feed, so the same candle can carry different tick volume at two brokers. Three substitutes are available, in order of usefulness. Tick volume still works as a proxy for relative participation, so a breakout candle with a clear jump against its neighbours tells you more traders were active, provided you compare candles from the same session. CME currency futures publish genuine volume for the major pairs and can be used as a reference for the same period. Failing both, watch the spread and the range: spreads that tighten as the handle completes, followed by an expansion in candle range on the break, describe the same underlying shift. The rule to work with is simple. A close above the handle high is the first-order confirmation and everything else is supporting evidence. A breakout on unremarkable tick volume is still a breakout, and waiting for a stock-style volume surge on a currency pair means waiting for a signal that the market does not produce. The number of price updates recorded during a period on a forex platform, used in place of traded volume because decentralised markets publish no consolidated figure. Two entries, and the choice is between certainty and price. The breakout puts you in as soon as the pattern completes; the retest gives you a better level at the risk of never filling. Enter on a candle that closes above the handle high. On a daily chart that means the daily close, on a four-hour chart the four-hour close, and the difference matters because price frequently trades above a level without closing there. After the break, price often returns to the handle high and holds above it. Entering on that hold shortens the distance to your stop considerably. When the retest never arrives, leave the trade alone rather than chasing it upward. The stop belongs just below the handle low, with a buffer for normal volatility. That is the level where the pattern is objectively wrong, so it is the level worth paying for. Putting the stop under the cup instead feels more conservative and usually ruins the trade arithmetic. On a cup 130 pips deep, a stop at the base turns a 62 pip risk into a 152 pip one without improving the odds. Note also that spreads widen around breakouts, so a stop set flush against the handle low can be taken out by the spread while the chart price never reaches it. Read more：Breakout trading strategy in forex: how to trade successfully The measured move is the standard approach and it traces back to O'Neil's original description: measure from the right-hand peak of the cup down to the cup low, then add that distance to the breakout point. Worked through on an illustrative GBP/USD daily cup, with figures kept internally consistent so the arithmetic can be followed: Right peak of the cup: 1.2980. Cup low: 1.2850. Cup depth = 130 pips Handle low: 1.2940, which is 40 pips off the high and inside the 43 pip limit Handle high, and the breakout level: 1.2980 Entry on the close above the handle high: 1.2992 Stop 10 pips below the handle low: 1.2930. Risk = 62 pips Target: 1.2992 plus 130 = 1.3122 Reward 130 pips against 62 pips of risk, a ratio of 2.10 to 1 The ratio holds up because the stop sits against the handle rather than the base. Entering on a retest near 1.2985 trims the risk to 55 pips and lifts the ratio to about 2.4 to 1, which is a larger improvement than anything the target side can offer. The projected depth is a minimum objective, not a forecast. Taking part of the position off around the halfway mark is a reasonable habit. One invalidation rule sits alongside the stop: a close back below the handle low voids the target immediately, whether or not the stop has been touched. The same illustrative GBP/USD setup, run to completion and then run again with the opposite ending. These are self-consistent worked figures for following the method, not a record of a particular historical trade. Identifying the pattern. Price advances from 1.2580 to 1.2980, a 400 pip run. It then rounds down to 1.2850 over about seven weeks and curves back to 1.2980. The cup low retraces 130 pips of the 400 pip advance, roughly a third, and the base is curved rather than pointed. The cup spans 38 daily candles. A handle then forms over 9 candles, drifting to 1.2940, which is 40 pips off the high and inside the 43 pip limit set by the one-third rule. Entry. The daily candle closes at 1.2992, above the handle high at 1.2980. Two earlier candles traded above that level intraday and closed back under it, and neither qualified. Risk. Stop at 1.2930, 10 pips below the handle low, giving 62 pips of risk. At 0.4 lots each pip is worth about £3.10, so the risk is roughly £192. On a £20,000 account that is just under 1 per cent. Margin is not the constraint at this size: under the FCA cap of 30:1 on major pairs, a 0.4 lot GBP/USD position needs around £1,700. Target and result. Cup depth 130 pips projected from 1.2992 gives 1.3122. Price reaches 1.3108 fourteen candles later and stalls beneath the figure, so the position closes there for 116 pips, about £360, a realised ratio of 1.87 to 1 against the 2.10 planned. The failure branch. Same pattern, same entry at 1.2992. Four candles later price closes at 1.2932, below the handle low. The invalidation rule fires at the close below 1.2940 rather than waiting for the stop, so the position is closed near 1.2935 for a 57 pip loss instead of 62. Re-entry is only considered if a new handle forms above the cup low and produces its own close above resistance. If price closes below 1.2850, the cup itself is gone and so is the setup. Both endings came from the same chart. The difference was the rules written down before the entry, not the pattern. The mirror image works the same way in reverse. An inverted cup and handle is a rounded top followed by a shallow rally on the right-hand side, and it appears after a decline rather than after an advance. The mechanics invert cleanly. Entry comes on a close below the handle low, the stop goes just above the handle high, and the target is the depth of the inverted cup projected down from the breakdown point. The depth and duration guides from the table above apply unchanged. This variant matters more for currency traders than for equity traders. A CFD position is as easy to open short as long, so half of the pattern's opportunities are available rather than a quarter of them. Most coverage of this pattern either skips the inverted version or mentions it without a single number attached. The pattern comes from O'Neil's 1988 work on US stocks, and the original rules assume an equity market. Three of those assumptions do not survive the move to currencies. The first is volume, covered above: there is no consolidated figure to expand. The second is the trading calendar. Stocks open and close each day, so gaps carry information and a breakout candle is a discrete event; spot forex runs continuously from Sunday evening to Friday night, and the daily boundary is a broker convention rather than an auction. The third is the timeframe guidance. Describing a cup as one to six months long makes sense when the chart you mean is a daily one, and it says nothing useful to someone working on a four-hour chart. The way to hold this is that the geometry transfers and the confirmation rules do not. The rounded base, the shallow handle, the depth ratios and the measured move all describe price behaviour that occurs in any liquid market. The volume requirement and the calendar-based durations need replacing with the substitutes set out earlier. Yes, it is a bullish continuation pattern: a consolidation base followed by a breakout above the handle. The condition people skip is the prior advance, because a rounded base with nothing to continue is not this pattern at all. Check that a clear uptrend preceded the cup before treating the bias as given. The traditional answer is one to six months for the cup and one to four weeks for the handle, which comes from daily equity charts. On a currency pair it is more practical to count candles: roughly 25 to 60 for the cup and 5 to 15 for the handle, on whichever timeframe you are working. A handle that runs well past that range is a sign the buyers have not returned. The cup should ideally retrace about a third of the prior advance, stretching to a half in volatile conditions, and beyond a half the setup loses its meaning. The handle should retrace no more than a third of the cup's right-side climb, and a close below the handle low voids the pattern. On a 400 pip advance that puts the cup low around 130 pips down and the handle within about 43 pips of the high. A close below the handle low invalidates the pattern, and the position should be closed at that point rather than waiting for the stop to be reached. Re-entry is only worth considering if a fresh handle forms above the cup low and produces its own close above resistance. If price closes below the cup low, the base itself has failed and the setup is finished. The shape appears on currency charts as readily as on equities, since it describes accumulation rather than anything exchange-specific. What does not transfer is the confirmation rule, because spot forex publishes no consolidated volume, and the calendar-based durations from equity guides need converting into candle counts. Use the geometry and replace the confirmations. Treat the close above the handle high as the confirmation, since that is the only signal the market reliably provides. Tick volume can support the read as a proxy for relative participation, provided you compare candles from the same trading session, and CME currency futures volume offers a genuine figure for the majors if you want a cross-check. Four checks make the pattern: a real advance beforehand, a rounded rather than pointed base, a cup retracing about a third of that advance, and a handle staying within a third of the cup's right-side climb. The target is the cup depth projected from the breakout, and the stop sits just below the handle low. Three judgements are worth keeping. A base with no handle is a rounding bottom and trades differently. A handle deeper than a third has already told you the answer. And on a currency chart the volume requirement from the textbooks needs replacing rather than waiting for. The arithmetic is worth doing every time rather than assuming it: a 130 pip target against a 62 pip stop is a trade worth taking, and the same pattern with the stop parked under the base is not. Pull up a pair you follow, find two historical cups, and run both through the threshold table. Checking how many clear every line is quicker than reading another description of the shape. The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
Bitcoin enjoyed a thunderous rally on Monday, blasting over $86,000 per coin and matching prices not seen since January. The original cryptocurrency is now almost in the green for the year, having erased most of the losses incurred over the last nine months. The wider crypto sphere likewise saw explosive inflows of capital, prompting Bitwise CIO Matt Hougan to declare that crypto winter was ‘over’. Hougan went on to state that both the SEC and CFTC were the most ‘pro-crypto […] in the history of the US’ and that the failure of the Clarity Act to pass through Congress may in fact pave the way for ‘stronger pro-crypto regulation’. Music to the ears of market participants who have had absolutely nothing to celebrate since the crypto sector peaked back in October 2025, only to nose-dive into a brutal 50% correction during the following winter months. While prices have a long way to go before new records start being broken, particularly in the altcoin market, early signs of thawing are a sight for sore eyes. There has also been a sizeable rotation back into semiconductor stocks early this week, following the explosive launch of Meta’s Muse AI agent. Meta Platforms (META) gained 11% on Monday after third-party tracking data pointed to overwhelming demand for its new product, which also helped to restore confidence in the wider AI trade. A number of semiconductor companies have rallied hard so far this week, including AMD, which shot up 10% on Monday to establish a fresh record high, introducing the chipmaker into the $1 trillion market cap club. AMD recently announced a 10% price increase for AI accelerators, consumer GPUs, and motherboard chipsets in Q4, further showcasing resilient demand in the sector. Arm Holdings (ARM), Intel (INTC) and Qualcomm (QCOM) also outperformed, rising 21%, 14% and 12% respectively since the last weekly close. The strength in chip stocks was enough to push the Nasdaq Composite to back-to-back record highs, finally breaking the prior all-time high established back in early June. Presidents Trump and Xi are scheduled to meet later today for a series of talks, one of which will focus on artificial intelligence. In particular, the two leaders are considering launching a formal notification system that would warn one another about safety incidents that could potentially threaten national security. Trade will also feature heavily on the agenda, as the current truce on tariffs is set to expire on the 10th of November. Iran will undoubtedly come up in conversation, as the conflict prepares to enter its eighth month. Speaking of which, it now appears as though some tangible progress is being made, as Iranian Foreign Minister Abbas Araghchi met with US Special Envoy Steve Witkoff for a face-to-face meeting at the UN General Assembly in New York. An initial framework to reopen the Strait of Hormuz emerged as a result of the private talks, while the Iranian delegation confirmed having ‘full authority’ to revive diplomacy. On the other hand, Trump threatened to ‘annihilate’ Iran if it refused to strike a deal, leaving spectators as befuddled as ever. Crude oil prices have fallen modestly since this time last week, from $108 per barrel last Tuesday to $98 late last night. West Texas Intermediate meanwhile broke below $90 per barrel yesterday – the large spread between the two benchmarks reflecting the risk and transport premia affecting seaborne contracts. #BTC #CRYPTO #META About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
Orders of Very Large Crude Carriers (VLCCs) have surged to a 25-year high in 2026, as global ship owners rush to commission new supertankers. With three months to go before the end of the year, 217 VLCCs have already been ordered so far, which is more than double the 93 total orders in 2025. With price tags for new vessels running at around $130 million apiece, the total order volume is rapidly approaching $30 billion, demonstrating how desperate shipping companies are to secure more freight capacity. The backlog in shipping yards around the world has now reached over 250 ships – the largest number since before the 2008 financial crisis. The spike in demand for oil tankers may seem counterintuitive given the unwillingness of vessels to go anywhere near the Strait of Hormuz, but the ongoing conflict in the Middle East is in fact the major catalyst behind the recent surge in VLCC orders. With Gulf deliveries proving to be unreliable, buyers in Europe and Asia have been forced seek out alternative sources of crude oil and substitute shipping routes via which to secure them. The Atlantic Basin has stepped up to the task. Shipments from the US Gulf Coast to Asia have seen massive increases in volume over the last few months, with US exports hitting consecutive monthly records throughout the second quarter of this year. Brazil, Guyana, Venezuela and parts of West Africa have likewise seen a huge surge in demand for their precious resources. The obvious problem is that for buyers in Asia in particular, these Atlantic oil fields are much further away, adding thousands of kilometres to the normal shipping routes. A typical journey from the southern loading terminals in Iraq, through the Persian Gulf, across the Indian Ocean, through the Malacca Strait and up to Japan is around 6,600 nautical miles. A typical VLCC maxes out at around 15 knots on a good day, meaning a one-way trip on such a route would take about 20 days, including loading, customs and everything else. In contrast, a tanker setting out from the US Gulf Coast would have to cover 15,000 nautical miles to reach the same destination, which could take well over 45 days. Sticking with Japan as an example, the island nation consumes about 3 million barrels of oil per day. Modern supertankers carry up to 2 million barrels, meaning a full shipment is only enough to provide 16 hours of fuel. Japan therefore needs a constant stream of tankers arriving at its shores every single day in order to maintain a steady supply of energy and petroleum products. This is where adding additional distance to the supply chain creates problems. Most nations around the world require a never-ending chain of supertankers in order to function, but the longer the chain becomes, the more ships are required to complete it. The inescapable mathematical problem is that doubling the distance doubles the necessary number of ships. This is why orders have skyrocketed. Shipping routes are now thousands of nautical miles longer than they used to be, and shipping companies do not have large enough fleets to fill the gap. The lack of available ships has sent the cost of chartering a VLCC through the roof – more than tripling according to some reports – awarding ship owners the massive amounts of cash necessary to expand their fleets. The sudden windfall is also allowing shipping conglomerates to prematurely retire some of their older tankers in favour of more modern, fuel-efficient ships that comply with stricter environmental regulations. The crucial aspect of all of this is that Very Large Crude Carriers take several years to build and are designed to operate for 20-25 years. This means that the people commissioning these vessels are expecting them to still be active in the 2050s. These companies do not spend billions of dollars on a whim. If the conflict surrounding Iran is destined to be short-lived, then why the colossal investment in new ships? The decision makers at the top seem to be anticipating a permanent change in the way the global oil trade functions. The major oil producers of the past may not be those of the future. The landscape has already changed significantly due to the fracking boom in the Permian Basin, turning the United States into a net exporter of crude oil almost overnight. As a result of the recent change of leadership in Caracas, countless billions of dollars are now waiting to be deployed on new developments in the largely untapped oil fields of Venezuela. Brazil now produces 4.5 million barrels per day, rivalling Iraqi output even before recent hostilities curbed production. Guyana is another miraculous story, going from precisely zero barrels in 2019 to almost 1 million BPD in 2026. From small island nations in the Caribbean to huge territories on the west coast of Africa, the region is buzzing with activity. Over the next two decades, virtually all global crude extraction growth is expected to occur in the Atlantic Basin. Shipping companies are positioning themselves accordingly. About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.
There were no surprises in any of the central bank decisions last week, as the Federal Reserve, Bank of England and Bank of Japan all acted in line with expectations. Rates on the US dollar and the yen are now 25-bps higher than they were a week ago, while rates on the pound have remained steady. The major talking point that emerged from the trio of verdicts is just how hawkish the FOMC turned out to be, with all 12 members voting unanimously in favour of a hike. The collective reasoning behind the decision was equally unified; stubborn inflation, robust economic growth and geopolitical risk all played their part, leaving the committee with no other option than to bolster the interest rate on the greenback. Crucially, last Wednesday’s ‘dot plot’ revealed that the majority of Fed officials predict another rate hike before the end of the year, completely negating previous expectations. Foreign exchange markets were quick to adjust, immediately crushing the pound and the euro to multi-week lows against the dollar and sending the DXY north of 100 points. Two decisions to go in 2026, and interest rate traders are beginning to lean towards another 25-bps hike as early as October. The hawkishness of the Fed was matched by the dovishness of the Bank of Japan, whose decision was split 7-2, with two members urging patience and electing to keep rates fixed at 1%. Governor Ueda also refused to outline a specific timeline for future rate hikes, leaving markets with less confidence that such will be forthcoming. The yen fell hard after the decision, with USDJPY briefly spiking back up to 158 before retreating somewhat by the daily close. The difference in approach suggests that the interest rate gap between the two currencies is here to stay and will continue to put pressure on the yen throughout this year and into the next. The US Senate’s failure to move forward on the Clarity Act, coupled with the rate hike on the US dollar, turned into the perfect ‘sell the rumour, buy the news’ event for cryptocurrencies late last week. Bitcoin pumped straight back to $81,000 on Friday after strong institutional money flooded into ETFs during the lull in prices, squeezing short positions in the process. The bigger news is that the lack of progress in Congress has provoked the CFTC into advancing new rules of its own, in the form of two pre-rule packages entitled ‘Regulation Crypto Asset Transactions’ and ‘Regulation Crypto Asset Markets’. The two submissions are parallel to the SEC’s ‘Regulation Crypto Assets’ proposal, currently open to public comment. The sudden alignment between the two supposedly independent bodies is no coincidence. The synchronised nature of the actions undertaken by the SEC and CFTC suggests that there is some serious weight being thrown around behind the scenes. Influential forces clearly want something done, and they want it done fast. Very little on the economic calendar in terms of tangible data publications this coming week. The Swiss National Bank is scheduled to deliver its verdict on the Swiss Franc on Thursday, with no change expected, while durable goods orders in the US may raise an eyebrow or two the following day. The big event of the week is the Trump-Xi summit in Washington D.C., set to begin on Wednesday. The meeting between the two presidents will feature a consortium of notable CEOs from the tech sector, including Elon Muck, Tim Cook, Jeff Bezos, Jensen Huang, Sam Altman and Michael Dell. As made obvious by the guest list, artificial intelligence and chip manufacturing will form the central pillar of deliberations, although the unending quagmire in the Middle East will certainly be discussed, as will the ongoing trade dispute between the US and China. Worth noting that Japanese markets will remain closed until Thursday this week, while Chinese markets will close a day early on Friday in observance of Mid-Autumn Festival. #BITCOIN #TRUMP #XI
A rectangle pattern is a consolidation in which price is held between two horizontal lines, support underneath and resistance above. You have almost certainly traded through one without naming it. The market stops trending, starts drifting sideways, and the same two levels keep rejecting price for weeks. That is where the trouble starts. The chart looks flat, but you cannot tell whether it qualifies as a rectangle or is simply noise. When the break finally comes you hesitate, and on the occasions you do take it, price snaps straight back into the range and stops you out. Most educational pages stop at the definition and leave you there. This article goes further in four directions: a checklist you can tick off to confirm the pattern, three ways to trade it with the entry rule written down to the candle, the target calculation carried all the way through with real numbers, and the published hit rates so you know what the pattern is actually worth. A rectangle pattern is a consolidation range in which price has touched horizontal support and resistance at least twice on each side, and it normally acts as a trend continuation pattern. The mainstream approach is to enter in the direction of the break once a candle has closed beyond the boundary, with the target projected from the height of the range. False breakouts are the main risk, which is why closing prices and volume are used to filter them. Open your trading account today with Radex Markets. A rectangle pattern is a period of sideways movement in which price is contained between two horizontal, parallel boundaries, with buyers and sellers briefly in balance and neither able to force a direction. It almost always appears after a directional move, which is why it is classed as a continuation pattern, although a break against the prior trend turns the same shape into a reversal. The mechanism is simpler than the name suggests. A trend runs, participants who are already positioned start taking profit, new participants step in against them, and for a while the two flows cancel out. The market is digesting the move it has just made and waiting to choose its next direction. For this reason a rectangle is better read as a pause with a decision at the end of it than as a signal in its own right. Read more：Forex Technical Analysis: A Step-by-Step Beginner's Guide There are only two readings of a rectangle, and which one applies depends entirely on the trend that walked into it. The table below sets the two side by side. Here is what the bearish version looks like without a chart in front of you. Sterling had been falling for six weeks, then settled into a band between 1.2418 and 1.2562 on the daily. Support was tested three times, resistance twice, and each rejection left an upper wick rather than a close beyond the line. On the ninth week a daily candle closed at 1.2394, below the floor of the range, and the decline resumed from there. A bullish rectangle is a pause inside an uptrend. Price stalls, moves sideways between the two levels, and the advance resumes once a candle closes above the upper boundary. The prior trend has to exist before the label applies, and that is the part most traders skip. A range that appears out of a directionless market is a range, not a bullish rectangle. A bearish rectangle is the same structure inside a downtrend, with the decline resuming once price closes below the lower boundary. The reading rules mirror the bullish case exactly, direction reversed. In practice the bearish version tends to resolve faster, because falling markets are usually the more impatient of the two. The two boundaries are not lines you draw by eye and hope for. The lower one is a demand area where buyers keep stepping in, the upper one is a supply area where sellers keep offering, and price travelling between them is supply and demand temporarily in balance. That explains why the same level gets tested again and again. Orders accumulate there. Traders who missed the first bounce leave resting bids at the same price, and traders who were caught long near the ceiling leave orders to exit at the same price on the way back up. The level holds because people remember it. It also explains why a longer range often produces a more energetic break. The more weeks the boundary survives, the more orders pile up behind it, and the more stops sit just beyond it. When the level finally gives way, the move is fed by both the new positions and the old ones being closed. As a result, the same boundary frequently flips role afterwards, with broken resistance holding as support on the way back down. That flip is exactly what the retest entry below relies on. One warning that belongs here rather than later: some moves beyond a boundary exist specifically to trigger those resting stops before price returns inside the range. Read more：Breakout trading strategy in forex: how to trade successfully Get the label wrong and every number that follows is wrong with it. A rectangle is most often confused with flags, channels and triangles, and three axes separate them. Each confusion carries its own cost. Read a flag as a rectangle and you overstate the target, because a flag measures from the pole and not from the box. Read a channel as a rectangle and you draw horizontal lines across boundaries that are actually sloping, so your levels drift out of position as the week goes on. Read a converging triangle as a rectangle and you sit waiting for touches at equal width that are never going to arrive, because the range is narrowing by design. Strip the labels away and a rectangle is simply a box range. What distinguishes it is that the boundaries are horizontal and hold the same width from the first touch to the last. Read more：Bull flag pattern: A practical guide for forex traders Identification runs off a checklist you can tick, not off feel. Work down the six items below and the pattern either qualifies or it does not. Run the list against a real case. The euro fell from a July high of 1.1276 and then stopped, spending the next nine weeks between 1.0642 and 1.0818 on the daily chart. Support took three separate tests, resistance four, and on each of those seven occasions price reversed within the band rather than closing outside it. The boundaries were drawn across the closing prices at the extremes, not the wicks, which is why they sat flat rather than fanning outwards. Two edge cases decide the marginal calls. Consolidation that lasts less than three weeks belongs to the flag family, while the rectangles worth trading tend to develop over months. And a level touched only once is not a boundary, it is a single reaction; without the second touch there is nothing to say the level means anything to anyone else. Read more：How to Read Forex Charts for Traders Three approaches share the same pattern and divide the work between them. The mainstream one enters in the direction of the break, the conservative one waits for the break and then a retest of the boundary, and trading inside the box is only worth considering when the range is wide enough to pay for itself. Each is set out below against the same three items, so you can read across and pick the one that matches how you actually trade. Entry condition: a closing price beyond the boundary. A wick that pokes through and pulls back is not a break, and treating it as one is the single most common way traders lose money on this pattern. Stop: on the far side of the boundary, or just inside the line, with a volatility buffer added so that ordinary noise cannot reach it. Suits: breaks that run in the same direction as the trend that walked into the range, read on the daily chart first. Entry condition: wait for the confirmed break, then for price to return to the old boundary and hold it. This is the supply-and-demand flip described above, with broken resistance acting as support. Stop: below the low of the retest. Suits: traders who would rather not chase and will take a tighter stop in exchange for a worse fill. The cost is real and worth stating plainly, because strong breaks frequently never retest at all, and this approach will sit out a share of the moves it correctly identified. Entry condition: sell near the ceiling, buy near the floor, and take the swing back across the box. Three preconditions are non-negotiable. The range has to be tall enough that the distance to the opposite boundary comfortably covers the spread and the stop. Both boundaries must already have been touched at least twice, so you are trading a level rather than a guess. And no major data release should be due inside your holding period. This is at its most dangerous late in the life of a rectangle, when the break can arrive on any candle, so the false-breakout rules below apply here even more than they do to the other two approaches. One case, carried from the first touch to the closed trade. The euro range described in the identification section is the one used throughout, so the numbers below follow on from it rather than starting again. Before the example, one adjustment. The volume expansion that stock-market teaching leans on does not exist in spot forex, because there is no central exchange totalling the shares traded. What the platform shows you is tick volume, a count of price changes rather than of contracts. It is useful for comparing activity on one candle against another on the same chart, and useless for comparing magnitude with anything else. Tick volume is the number of price updates recorded in a given period, used in spot forex as a proxy for activity because no centralised trade volume exists. It shows relative participation on the same chart, not the number of units traded. Take the euro range described earlier. Through the nine weeks inside the box, daily tick volume averaged around 11,400 ticks per session, drifting lower as the range matured. The candle that closed above 1.0818 printed 27,600 ticks, roughly 2.4 times the range average, and it had the body to match: a 96-pip daily range with a 78-pip body, closing in the top fifth of its own range. Activity, direction and close all agreed. Compare that with the attempt three weeks earlier. Price closed a few points above the same boundary on tick volume of 12,100, barely 1.06 times the average, with a 24-pip body and a long upper wick. Within three sessions it was back inside the range. Nothing about the price action said fail; the participation did. For this reason, treat volume as a confirmation rather than a requirement. The close beyond the boundary still ranks first, and a break on unremarkable volume is still a break. Volume simply changes how much room you give it. Every page on this subject gives you the formula. Very few carry it through to a number you could actually place an order on, so here is the same trade taken to its arithmetic. Height = 1.0818 − 1.0642 = 0.0176, or 176 pips Target = breakout close 1.0836 + 0.0176 = 1.1012 Stop = 1.0782, placed 36 pips below the old resistance at 1.0818 Risk = 1.0836 − 1.0782 = 54 pips Reward = 1.1012 − 1.0836 = 176 pips Risk to reward = 176 ÷ 54 = 3.3 to 1 Two refinements matter more than the arithmetic. The first is partial exits: taking part of the position off around the halfway mark, near 1.0924 in this case, converts an open trade into a realised gain and a free option on the rest. The second is invalidation. The moment price closes back inside the rectangle, the measured move is void; the structure that justified the target no longer exists, and holding for it is hope rather than analysis. One framing correction to finish. The projected height is a minimum objective, not a forecast. Published testing on rectangle bottoms found an average gain far larger than the measured move itself, which tells you the projection is where the pattern stops making promises, not where the move stops. Honestly: the rectangle is one of the better-performing continuation patterns in published testing, but the hit rate varies by direction and by conditions, and the single high win rate quoted around the web does not exist. The figures below come from Thomas Bulkowski's large-sample work on chart patterns. Read those numbers with the sample in mind. They were measured on equities, not currencies, so treat them as directional guidance for forex rather than transferable percentages. Two findings do carry across in principle: breaks that run with the prior trend are markedly more reliable than breaks against it, and daily-chart patterns hold up better than the same shape on a five-minute chart, where a single institutional order can manufacture the break. What separates these figures from the high win rates circulating online is that they have a sample size and a date attached. Which leaves the trades that miss. Most of them are false breakouts, and they are handled by rules written in advance rather than by judgement in the moment. Timing matters as much as the rules. Thin sessions and the hour either side of a major data release produce the highest share of false breaks, which is the practical reason the volume row sits on the identification checklist at all. It can be either. A bullish rectangle forms when price consolidates during an uptrend and a bearish rectangle forms in a downtrend, and the direction of the break confirms which one you were looking at. The two variants are set out side by side above. It is primarily a trend continuation pattern, formed after an impulsive move while the market digests it. It acts as a reversal in the cases where price breaks against the prior trend rather than with it. Use the measured move: the target is the breakout price plus the height of the rectangle for a bullish break, or minus that height for a bearish one. In the worked example above, a 176-pip box projected from a breakout at 1.0836 gives 1.1012. Treat it as a minimum objective rather than a forecast. For a bullish breakout, place the stop slightly below the support level or just inside the broken resistance; for a bearish breakout, slightly above resistance. Add a volatility buffer in both cases rather than resting the stop exactly on the line. A confirmed break usually resumes the prior trend and runs towards the measured target, sometimes after a retest of the boundary it just cleared. A false break snaps back into the range instead, which is the signal to exit rather than to wait. A rectangle's support and resistance are horizontal, so the range keeps the same width throughout. A channel's boundaries are parallel but sloping, running with the trend rather than flat against it. The order of work does not change. Identify the pattern against the checklist, wait for a break confirmed on the close, project the target from the height of the box, and hold the false-breakout rules you decided on before the candle printed. The published numbers favour the trader who waits for confirmation, not the one who anticipates it. That is the whole edge in this pattern. A useful next step: open your own charts, find three historical rectangles, and tick each one off against the six checkpoints. The ones that fail the list are usually the ones that would have cost you money. The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Related concepts:
