What exactly is range trading? You may be wondering. If you have been looking at your forex chart, you will find that there are times where you will see the price moving within a trend channel. When the price is within a channel, we say that it is moving in a range bounded by an upper resistance and a lower support level.
So How Can You Trade The Range?
In this post, I will be sharing with you how I do range trading whenever the market is moving sideways or within a range.
Below are things you need in order to trade the range
1) Identify the Trend Channel: This is the number one thing that you must see in order to trade the range. Do remember to draw a resistance and support line of the trend channel you have identified.
3) Setup Your MACD Indicator: The MACD indicator can be a good tool to help double check whether the price will breakout of the range or will most likely stay within the range.
With all these setups and the range identified, all you have to do is to watch out for the price to go near the support and resistance lines that you have drawn.
When the price goes near the resistance level, you should take a look at your oscillator to check if the market is currently overbought. If your oscillator shows you that the market is indeed overbought, you should then move on to see your MACD to check if a bearish crossover is going to occur.
If all conditions are met, you can then enter a SHORT trade to grab the profit as the price is going to be repelled by the resistance level and continue to move in the range.
If you see the price going near the support level, you will then do the same as above but you will be looking out for the oscillator to give you an oversold signal and the MACD to give you a bullish crossover.
If you are interested in trading this range strategy, you can now try this out on your demo account and then fine tune them to suit your trading style. Once you are able to produce consistent profit from this range trading strategy on your demo account, you can then move on to trade in your live account.
Note to Readers
Do note that the above strategy is a general strategy that has not been fine tuned. In order for you to trade with it, please fine it tune on a demo account. If you do not know how to fine tune a strategy, please read the below
For those of you who are new to trading, you can read my blog post on forex trading guide for beginner
Remember: Do not rush into trading LIVE with any forex trading strategy that you learn. They must be tried out in demo account as it allows you to familiarize with it so that you can trade profitably with it.