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Identifying a Range

Identifying a Range

Richard Krivo, Trading Instructor

Power Course Instructor’s Response:Good question...You will generally see the trend begin to flatten out and begin to trade within a defined and repeated level of support and resistance. We would like to see this on a Daily and/or 4 hour chart...a range on "minute charts" is not established enough to trade without a greater element of risk.Ideally, one would want to see at least two tests of support and resistance before declaring a range to be in place.To trade a range, a trader would go long at support with a stop just below support or short at resistance with a stop just above resistance. The higher probability range trades will be those in the direction of the overall trend on the Daily chart. Also, when price action breaks out of the range, the breakout will likely (although no guarantees) be in the direction of the trend.See the chart below for some additional info...

Identifying_a_Trend_body_56396d1273797376-post-day-chart-5-13-10-.png, Identifying a Range

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