Range Bound OpportunityHere's one of the recent pairs on my watch list for this week. We can see that price has formed a confirmed range and is moving down towards resistance. For me a confirmed range means a minimum of 2 price rejections at a price level. It may or may not reach support this week. It all depends on the price momentum.
In general, when trading ranges it is important to realize the pros and cons. There is no guarantee that price will reach support. It may turn around and form a small range and breakout or may plunge right through support and breakout into a down trend. These are just a few of the possibilities. There's nothing guaranteed in trading. What we want is bullish evidence around the support area. I like to use candlestick patterns, but if you are new to range trading you an use any indicator or combination of indicators or patterns you wish and then you can decide on your entry method. I have used zones as well at times if you look at some of my past trade ideas. You can get in using a limit order, buy stop, or even market order. Stop loss is also personal and depends on your personal risk tolerance, so I won't comment much on that. Just know that a tighter stop will stop you out more, but get you a better RR. A more liberal stop loss will get you less stop outs but hurt your RR if the trade does go in your favor, so you choose.
Remember risk management largely determines the success of any strategy. Not the strategy itself. I will update if I see something that I consider bullish enough around support for entry. Any and all advice is simply my opinion and forex trading is risky. Follow at your own risk. Be safe and never risk more than you can afford to lose. Happy trading!
