Making the Most of Trading a Range
In this video, Roger Hawes, an Analyst from the Corellian Academy, focuses on range trading.
Range-trading, though not conceptually difficult, is a strategy that requires careful consideration of specific conditions and adhering to certain guidelines. It provides traders with the opportunity to navigate market fluctuations by providing the opportunity to generate profits in low volatility environments. In addition, this strategy's confidence-building aspect is underscored by the closely defined stop losses, allowing for the allocation of more capital and leverage.
As part of this trading style, traders should keep an eye out for market changes and possible breakouts resulting from new data or price action. As ranges persist in low volatility scenarios, substantial opportunities exist.
Furthermore, trading in a range involves capturing price action between levels of support and resistance, particularly in sideways markets.
To illustrate this strategy’s potential success and potential challenges, Hawes uses an Oil (CL) CFD price chart to illustrate.
However, it may be worth noting that chartists may have to spend time identifying a developing range, since they need to search for at least three touchpoints on both sides.
In conclusion, the narrative presented range trading as a nuanced but valuable addition to a trading portfolio, particularly in low volatility environments. It stressed the importance of patience, discipline, and adaptability in executing successful range trading strategies. In addition, a practical application of these principles was provided, demonstrating how these principles could be applied to profitable outcomes.
