Setting-up Ranging Strategies

Setting-up Ranging Strategies
A range bound market offers various opportunities to profit in this market. In this example, the range trader was able to use the zigzag motion to his/her advantage, by simply identifying major support and resistance levels, and then buying at the support level and selling at the resistance. There are various technical indicators that can help determine times of entry and exit points, yet the selection of the currency pair is still the essential and the first step in employing this strategy. Some currency pairs that are known to trade in a range bound market are EUR/GBP, EUR/CHF and CHF/JPY.

A strategy that involves buying as price moves to lower support levels, and selling as price moves to upper resistance levels.Range trading is a non-directional strategy which is based on the underlying assumption that 80% of the time, price action does not trend, but rather channels. Range trading offers several advantages including simplicity, and defined risk reward parameters.By focusing strictly on price movements and congestion points on the chart, range trading allows traders to ignore news-flow and simply concentrate on well defined areas of support and resistance.

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