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Forex Range Trading Strategies

Range Trading

What is a Range Bound Market (or a Ranging Market)?

A range bound market is a market that mainly moves between two lines, the upper one is called Resistance (because it resists the market from going upwards) and lower one is called Support (it supports the price in moving upwards).

forex range trading strategies

As we see in the picture, a typical range bound market goes up till it finds a resistance level, it kisses it and goes back down it it reaches a support level, kisses it then moves back to the resistance level again, and so on and on.

How can I trade in a ranging market envionment?

Whenever the market reaches a resistance and starts to bounce down, you should be selling. And whenever the market reaches a support level and starts to bounce up, you should be buying.

range trading forex

However, you should only enter a trade that agrees with the previous trend, never trade against it. So if the previous market has been an uptrend, you should only be buying. And if the previous market has been a downtrend, you should only be selling.