Range Market And Its Application In Forex Trading
Ranging Market is where prices bounce between high prices and low prices. There are special tricks to trade in such market conditions.
Ranging Market is where prices bounce between high prices and low prices. The high price acts as a resistance where the price can not break.
Similarly, low prices act as a level of support where prices cannot penetrate too. Market movements can be classified as horizontal or sideways.
Market range users are generally short-term to medium-term trading and usually last only a few days with a profit target of several tens of pips. This trading range is done using charts with or without certain indicators. This type of trading allows to open a fight position or in line with the main trend because the focus of the trading range is a short-term trend.
How to know the market Range and Its Application in Trade?
1. Using Line patterns
Using the line does need precision, we need to know HIGH LOW from the previous price to determine the line. This pattern can be mixed with a candle pattern.Hopefully, the future can be discussed.
2. using Average Market
The use of this method is to use the average price movement. we need to determine how the average price moves in a day? we can determine its own formula. for example
GBP / USD 125 Pips
EUR / USD 125 pips
AUD / AUD 100 pips
Application to open trade
the way is we notice HIGH LOW now. if we use GBP / USD 125 pips then HIGH – 125 pips. LOW + 125 pips.
we can do an order like the example above. TP can be adjusted
Or can use average price by seeing the price movement during the previous few days. with the same pattern of reduction of HIGH and addition of LOW
based on the average taken from a few days earlier in the average GBP / USD is 97. then you can make the line boundary like the example above. High – 96. and LOW + 96.
3. Using Daily Pivot
Often we are with the term Pivot point. In trading, of course, it would be very nice if we have a map that can give a picture where a position of a lever price relative to market conditions and where possible the movements of currency based on market conditions. Such maps will greatly assist us in deciding what transactions can be taken to make a profit.
The pivot point is a technique developed by stockbrokers on the stock exchange floor, which can help us see where a price level relative to the situation and market dynamics that happened before.
In accordance with the meaning of the word, a pivot point means a point or boundary where a price movement will reverse direction. In forex, the pivot point is the level where the market sentiment changes from ‘bullish’ (up) to ‘bearish’ (down) or vice versa. Pivot points are like support or resistance, prices that move close to this point will get resistance and will reverse direction. But if the price breaks and moves past this point, the movement will continue until it reaches the next pivot point.
Professional trade-offs often use this pivot point to identify important support and resistance levels. Simply put, the pivot point with all of its support and resistance levels is the area where the direction of currency movement has the possibility to change.