Hourly example

Profitable Forex Range Trading Strategy

There are 2 main ways that the market is moving if you take a close look at your trading chart. It is either moving in a trend or it is moving sideways which is what we call moving within a range (consolidation). In this post today, I shall be sharing with you my range trading […]

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    There are 2 main ways that the market is moving if you take a close look at your trading chart. It is either moving in a trend or it is moving sideways which is what we call moving within a range (consolidation).

    In this post today, I shall be sharing with you my range trading strategy so that you will know what to do when the market is moving within a range.

    video tutorial

    So first of all, let me show you the indicators that is required for this strategy.

    • Forex Bollinger Bands Indicator

    The purpose of using the Bollinger Bands Indicator is to help us to identify consolidation of market. If you have read one of my previous post on the Bollinger Bands, you will know that this indicator will narrow itself when the market is in consolidation. It will then widen as the market started to move in a trend.

    For this range trading strategy, what you are concerned in is for the indicator to have flat gradient.

    BB Flat

    As for the oscillator, they are used to identify whether the market is currently in the state of oversold or overbought. This indicator is used for the entry of position of this strategy.

    So How To Trade This Forex Range Trading Strategy?

    Do note that this strategy is more profitable on those time frame that are hourly and above. This is because the range on the 15 minutes, 5 minutes and 1 minute chart are too small to be profitable.

    Step 1: You will wait for the Bollinger Bands Indicator to have a flat gradient.

    Step 2: Wait for the price to hit either the Upper or Lower bands

    Step 3: If the price hits the lower band, you will enter a trade when the Stochastic/RSI shows you that the market is oversold.

    4 hour example

    If the price hits the upper band, you will enter a trade when the stochastic/RSI shows you that the market is overbought.

    Hourly example

    Step 4: Exit your position when the stochastic goes in the opposite direction or the price has hit the opposite band.

    This is one simple and reliable strategy that I will recommend you to try. Try trading it on a demo account until you are able to execute it well before you move to live trading.

    In order to help you better understand this strategy, I have recorded a video tutorial for you.

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