Range trading is not reserved for the Wild West of the markets, but it is certainly beneficial when a market lacks direction. The most important key to range trading is to find support and resistance to define the range. As with any trading strategy, this technique too requires strategic management of risk in the event of a breakout. Range trading is one of the most effective trading strategies associated with Forex trading. In the absence of a trend, or a direction in the markets. you too can carve your own path to prosperity using range trading. Let’s learn more about this innovative trading strategy.

Range Trading Strategies;

Step 1: Find Your Range

The first step of range trading is to find the range. Forces of supply and demand can impact prices in the forex market and this is where support and resistance enter the equation. Helping traders locate levels in which a supply and/or demand in a given currency pair may transform once lines have been crossed. Supply is the amount available at a certain price, while demand is the amount required or wanted at a specific price. Prices of a product or instrument can have a massive impact on the amount demanded from the marketplace or the supply that one can get. When price increases, seller’s willingness to offload the product will also rise, illustrated by the supply curve which shows how additional units become available as prices increase.

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