GBPJPY Range Trading Techniques A lot has been said in the past about trading with the trend and of course when the market is trending your probability should increase when doing so. The reality of course that the market spends most of its time in ranges and when this occurs finding trends can be tough.
In saying that, trading ranges can sometimes be easier to navigate the price action as the market is made up majority of channels and ranges, so when one is upon us we can grasp the structure of price more clearly.
Taking a look at the recent price action on GBPJPY, price had been in a range which is made up of smaller channels in its total structure. Knowing this can be very helpful for when price gets to one extreme or the other, either the highs or the lows to look for clear and concise patterns that can show you price wants to now target the other side of the channel.
As you can see from the 15 Minute chart in the last week alone, every time price has fallen it has formed a base at the lows between the 134.00 big figure and 134.15 level. These bases have all created the same bullish pattern which is a 3 drive pattern that can help give us clear information on where price wants to go next.
Once each of these patterns complete, all we have to do is be patient and draw an higher inner diagonal trend line and wait for this to break to the upside. By doing this it helps increase the patterns integrity and also can indicated clearly where to enter the market and also you can place a tight stop just under the 3rd and final drive of the pattern.
