Range Trading Strategy
A trading range is a period of time when a security's price moves between a consistent high and low. The top of the range is often a price resistance level, while the bottom is usually a price support level.
Traders can use trading ranges to identify opportunities to buy and sell. Some strategies include:
Identifying resistance and support
Look for points where the price has been rejected multiple times. The range high is the resistance area, and the range low is the support area.
Waiting for a breakout
A breakout above the range ceiling or a breakdown below the support floor can be a trading opportunity. Breakouts confirmed by volume are stronger signals.
Using technical analysis
Technical analysis strategies like support and resistance, moving averages, and volume trends can help identify price levels.
PGDM in finance, having 5+ experience in Equity, commodities , forex analysis and trading.
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