There are many strategies in trading. A trader selects the one he feels will suit his style of trading. It also depends on how much profit a trader wants. Or it depends on how much investment one wants to make. In both cases though, a sound strategy is a must. Even in the case of low investment, bad strategy can derail your trading career. Therefore one must select a trading method quite carefully. And equally important is proper analysis. A trader does this with the use of the right indicators. Forex range indicators are of special importance. And that’s because range trading is on the cards.
A simple method:
Range trading is not something too amazing. Application wise it’s quite simple. But it remains a fundamental strategy. For those how have been trading on breakouts or trends, it’s easier for them to switch to this strategy. In fact, it can be a complementary strategy to both. But even on its own, it is a good strategy.
On apparent vision, it is difficult to identify a range. Just looking at price charts isn’t enough. And that is why one needs Forex range indicators. These indicators enable you to spot range in charts. And being able to spot range helps you to negate uncertainty. That way trading on ranges becomes much easier.
Types of trades with Forex range indicators:
Now before one decides to be a range trader, one needs to learn its basics.
• Firstly, it’s all about analyzing a chart. Range is always within a support and resistance level.
• The basic idea of trading ranges is to enter near boundaries. So you buy when price is at the top. And you sell when it is at the bottom.
These are the main ideas behind this trading. So here you can make use of chart analysis as range Forex indicator.
Now there are many types of range trading. You can consider them as sub-methods to a parent strategy. For example:
a) Rectangular range:
Here resistance and support levels are almost horizontal. Therefore you have price moving only sideways. That’s why it is a “rectangular range.” You can find these ranges in almost all conditions. But some other ranges are more common.
b) Diagonal range:
These are also called price channels. Here you have a sloping price channel. And thus you see price moving within that slope channel. However this is a broader category. Hence it can fall under rectangular range as well.
c) Continuation range(s):
This is another kind that is useful in range trading. These are ranges that are inside trends. They occur within. There are types of these ranges. They are flags, triangles, wedges and pennants. They can be bearish or bullish.
This is the last type. Here a pattern is not easily identifiable. Firstly it occurs as a pivot. And then, support and resistance levels form around it.
Therefore one can see that range trading can be of many types. It enables you to take on numerous strategies. It lets you trade the way you want with Forex range indicators.
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