News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • Gold and silver prices have come under significant pressure recently. However, this correction lower could prove short-lived as price analysis hints at a reversal higher. Get your $XAUUSD market update from @DanielGMoss here:
  • The S&P 500, Dow Jones and crude oil prices have recently made critical advances to the upside. Is retail positioning supporting the case for further upside momentum?
  • An improving economic backdrop is bolstering crude oil prices and in turn, the Canadian Dollar. Still, the risk-sensitive Australian Dollar continues to move higher. Get your market update from @FxWestwater here:
  • Gold Price Forecast: Dovish FOMC Could Underpin Bullion Ahead of NFP - #Gold #XAUUSD $GOLD $GLD
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.42% 🇦🇺AUD: 0.35% 🇳🇿NZD: 0.30% 🇨🇦CAD: 0.20% 🇯🇵JPY: 0.16% 🇬🇧GBP: -0.33% View the performance of all markets via
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX:
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.64% Germany 30: 0.04% US 500: 0.00% Wall Street: 0.00% France 40: -0.02% View the performance of all markets via
  • GBP/USD continues to fail around the 1.3400 level and is unlikely to make a confirmed break higher ahead of any trade talk confirmation. Get your $GBPUSD technical analysis from @nickcawley1 here:
  • The Gold price sell-off has broken below key technical barriers and leaves the outlook for XAU/USD weighted to the downside heading into the close of the month. Get your $XAUUSD technical analysis from @MBForex here:
Trading the GBPUSD Narrow Range Breakout Strategy

Trading the GBPUSD Narrow Range Breakout Strategy

2013-11-15 19:08:00
Gregory McLeod, Currency Analyst

Talking Points

- According to Tony Crabbel, narrow range breakouts lead to resumption of the major trend

- Narrow Range breakouts can provide good risk to reward setups that are easy to identify

- GBP has been one of the strongest G-10 currencies and the uptrend is likely to continue

What is a Narrow Range Breakout?

Tony Crabbel is credited with first writing about Narrow range breakout patterns in his now out-of-print book, “Day Trading with Short Term Price Patterns & Opening Range Breakout” in 1990 some 12 years before Mark Fisher’s Logical trader book which also talks about the opening range breakout. The Narrow Range breakout patterns included the doji and spinning top Japanese candlestick patterns as these candles have small bodies illustrating the small trading range.

Forex traders can look for a breakout to the upside when prices move above the wick high of spinning top or doji candlestick pattern. A break to the downside below the low the narrow range candle signals a sell.

Trading_the_GBPUSD_Narrow_Range_Breakout_body_Picture_2.png, Trading the GBPUSD Narrow Range Breakout Strategy

The Forex narrow range breakout trade is based on the typical price behavior that moves from periods of low volatility to periods of high volatility. Imagine price as a giant spring that can be compressed to a very compact and small size then when the spring is released, it expands to many times its original compressed size.

As traders, we look for these compressions as they signal that a big move is around the corner. It allows traders to predefine their risk in the trade and to also calculate possible price objectives. In addition we would look to trade these breakouts in the direction of the dominant trend.

What this means is that if the daily trend is up then we would only take topside breakouts above a narrow range candle’s previous high. In addition we would ignore sell signal. Similarly, if the daily trend is down, then we would ignore upside narrow range breakouts.

On the other hand, if the daily trend is ranging in a sideways consolidation, then either upside or downside breaks can be traded.

Learn Forex: GBPUSD Narrow Range Breakout Setup

Trading_the_GBPUSD_Narrow_Range_Breakout_body_Picture_1.png, Trading the GBPUSD Narrow Range Breakout Strategy

(Created using FXCM’s Marketscope 2.0 charts)

Trading Example

The current trading setup shows a GBPUSD daily chart with a spinning top at November 14th with a high of 1.6099 and a low of 1.5987. On November 15th, a wide rage candle broke the top of the spinning top candle. Aggressive traders can buy the breakout above the previous day’s high. Next, they would place a stop 5 to 10 pips below the low of the current candle. A limit can be set just below the new level of significant resistance in the 1.6250 area.

On the other hand, more conservative traders will want to wait for the daily candle to close above the previous day’s high before entering long. A stop would be placed 5 to 10 pips below the low of the current candle. The dotted green and dotted red line mark the high and low of the range. A next day move above the high is bullish, while a next day move below the low is bearish. Since the daily trend is up we would ignore sell signals and only take buy signals as they are aligned with the trend.

In sum, traders have a great opportunity to rejoin a very strong GBPUSD uptrend using narrow range candles as a trigger. It is important to note that whipsaws and pattern failures can happen not only with this strategy but other breakout strategies. So it is important that you use stops.

---Written by Gregory McLeod Trading Instructor

To contact Gregory McLeod, email

To be added to Greg’s e-mail distribution list, please click here.

Follow me on Twitter @gregmcleodtradr.

This article showed you how look for a triangles to find a potential trade setup. I want to invite you to enroll in our free Trade Like a Professional Certificate Course. Sign our Guestbook to gain access to this course that will help you get up to speed on Forex market basics. You can master the material all while earning your completion certificate. Register HERE to start your Forex learning now!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.