Trading ranges are sideways markets that conform to values of support and resistance. During today’s Technical Trading Tools & Tactics webinar event, we covered how to identify and trade these markets.
One way to identify range bound markets is to first use the ADX trading tool. This indicator is used to measure the strength of the trend, and finding a reading under 20 can help traders find a potential range. An example of this can be seen below, with the current ADX reading for the NZD/USD residing below 20.
From here traders can use a variety of techniques to trade the range. The key is to find opportunities to buy the market near support, and sell the market close to resistance.
Lastly, traders should always manage risk. If the market begins to breakout from support or resistance, stop orders may be placed either below or above these values respectively.
Did you miss today’s LIVE webinar event? Don’t worry, you can see a full list of upcoming webinars on our events calendar ! Our next Technical Trading Tools & Tactics webinars will be held on Thursday this week!
Looking for more information on trading strategies? Check out Forex for Beginners guide here !
--- Written by Walker, Analyst for DailyFX.com
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