Hi. The purpose of this thread is to share range trading ideas and hopefully learn something new in the process. If you have a range trade idea or can offer some good advice to other newbies learning to range trade, please post a reply. Finally, I am a newbie at this so please take my ideas with a grain of salt.
Ok, here goes.
I have placed an entry order to buy GBP/AUD at 2.3779 (accounting for a 15 pip spread) with a stop at 2.3719 and target 2.4160. I believe this pair is consolidating into a range from 2.3727 - 2.4319 as shown by the fibos on the attached daily chart.
Fundamentals are also important. I will be checking these to see if they conflict with my technical analysis.
Hello fellow range traders. My GBP/AUD entry order has not been called yet and I am keeping this order open as it still looks good today.
I’d like to discuss why the following AUD/NZD trade didn’t succeed as it was very well outlined by FX analyst in the analyst arena.
Orders to buy were placed at 1.1235 with stops at 1.1185 and targets at 1.1305. I believe the analyst incorrectly calculated a narrow range. Viewing the attached chart, the range appears to be 1.1120 to 1.1382 and NOT the 1.1220 to 1.1326 that I believe the analyst was looking at (if not those exact numbers than close to it). How could this disaster of a loss of 50 pips been avoided? I believe that by observing the stochs (or your preferred indicator) it clearly shows, that it had a long way to go down before going back up which brings me to the conclusion that your range trading strategy cannot be based on support and resistance alone as you will make mistakes in determining the range a good portion of the time. Unless you’re in a clear sideways market with obvious highs and lows, you’re asking for trouble. In fact, I am taking a chance by setting entry orders in advance and not being there to observe where the market is in relation to the stochs or other indicators. Should I avoid doing this? I would say no because I might miss some of the best opportunities while I’m sleeping. So, the alternative is to take the wider range for your trade. Yes, you may miss some entries, but to my thinking you will be more profitable in the long run. Any thoughts from the range trading pros?
hello mate, while range trading do you consider pivot points strategy at all?
I’d like to focus on some range trading and am looking some good strategies on this. I’d like to think of doing some long shorts i.e. keeping positions open for a while & taking profit when its produced some big pips.
if anyone’s got any good strategies for range trading…pls can you post them soon
I don’t really use pivot points in my strategy, but I’d love to hear from someone who does. Range trading can be quite profitable if done well. The key is getting out before it trends.
Ok. GBP/AUD is still looking good, but my order has still not been called. I’ll continue to watch this. We saw what happened earlier with FX Analyst and the loss of 50 pips and AUD/NZD. So, we are going to see if I can fair any better. I just entered long at 1.1156. I set a tight stop (not quite to resistance) as I am seeing stochs below 20 and curving up. My target is 1.1262 or 93 pips considering a 13 pip spread. As a recap, I believe this is ranging from 1.1121 to 1.1383. I checked for trend using the 65, 20, and 7 MVA. Wish me luck.
Stochs have flatlined on GBPAUD in what appears to be the beginnings of a reversal. This has not dropped low enough to trigger my range entry and the pair seems to be unable to break support at 2.3813. This appears to be stronger than I thought. I am watching this pair closely as I don’t want to miss this gravy train. Right now, it’s looking like the optimal entry was at the 2.3813 support, but I will enter anyway once I see stronger indications of a reversal.
Hi all. Well, my GBPAUD order was finally called. The pair dropped all the way to bottom support at 2.3729 but failed to break it. I am tempted to take my profit of 58 pips and run right now. I will watch this closely to see if I see an upturn in the stochs. Right now stochs are flat with a bearish candle. But it looks like I correctly called the bottom of this range. I will hopefully use the big grin smilie when I actually close this trade. For now, we’ll settle for this one.
Unlike my GBPAUD, I am not happy with my entry to AUDNZD. Yesterday, I wrote something about the stochs below 20 and turning up. But this is what I would like to call scanner syndrome. This is when you’ve stared at the charts long enough that you start to see what you want to see. I had called the bottom of the range at I believe 1.1121 or close to it. This does appear to be correct as last night it tested it but failed to break it. But I had entered rather rashly yesterday WAY higher. Thankfully, I didn’t lose my shirt as I adjusted my tight stop to a wide one after watching this late yesterday. This is why us newbies should stick to larger time frames. You have more time to fix your mistakes. Now I am in the unfortunate position of having gotten in a good trade too early and risked way more than I wanted to. I think I may get lucky this time as the next candle is starting to look bullish. But it’s too early to say. The point is I would have been WAY profitable by now if I’d just bought at the bottom of the range I had indicated a long time ago. Learn from my mistake though, stick to your range and only enter with CLEAR signals. Beware of SCANNER SYNDROME! Of course, I will be watching this closely to see how it plays out and if I sink or swim. No big grin smilie here either way though.
Ok. I am moving up my stop to 2.3805. There is no way I’m going to lose money on this trade, but I might get stopped out at a lower profit. We might as well call this one newbie jitters. But stochs are still flat and I just don’t like the bearish look to it.
Well, you probably guessed it. My GBPAUD stop was called at a measley 26 pips. No big smilie. Still, some profit is better than no profit. I learned from this lesson that when approaching considerable resistance (in this case at Fibo 2.3849), it is better to take your current profit and then reenter the trade when indicators are stronger. As a recap, stochs were still flat with a bearish candle. I should have exited at my 58 pips and then reentered later. Now, I’m looking to go long again on this pair once stochs begin to turn.
I closed out AUDNZD once it broke even as I had entered WAY to early for this pair. I didn’t gain or lose profit wise, but chalked up some more experience. My lesson for this pair is to avoid scanner syndrome if possible. Take a break! Also, I am looking to reenter this trade once signals are stronger.
By the way, I am using this forum as sort of an accountability to my trading. This is why I am being so transparent and posting my trades before they happen. Posting it here forces me to think things through. Of course, it would also be nice to get a perspective from other range traders or newbies like myself who are learning it or to get new trade ideas.
I have placed a new entry order to go long on AUDNZD opening at 1.1145 to account for an 8 pip spread. Stochs have crossed, are below 20 and this time are indeed curving up. I placed a wide stop at 1.1095 as there are several things that make me nervous entering this trade. The chart currently shows a bearish candle. I think it might test the bottom one more time before making the push up. Also, the weekly chart stochs show this is still going down. I readjusted my fibo levels slightly using a double bottom and double top as I felt this more closely aligned with actual support and resistance. As long as 1.1137 holds, this should be a solid trade. My target is 1.1230 or about 85 pips.
Ok. I won’t risk an entry order for GBPAUD right now as stochs are flat but this is getting close. Stochs look like they are about ready to cross and are oversold. Also, I am seeing the beginning of a bullish candle here. Finally, we are at the bottom of the range 2.3739 - 2.4288 (adjusted fibo levels to double bottom and top). I expect the best entry will come later this evening or in the early hours. I will not be a happy camper if I enter this trade late. So, I’m going to break my routine a bit and check this again tonight before going to bed.
After all this waiting, the pair has trended out of its range and out of contention as a range trading pair. Why? As has been said, news can do scary things to a currency, and I think this is what happened here. For one thing, the AUD came out with a much higher GDP than expected thus fueling expectations of a rate hike. I believe this may have sent the GBPAUD out of its range. That said, the rule is to exit range trades before they trend, so I will be switching to a trend strategy for this pair as it still looks primed for a reversal. In any case, there are plenty of range trading opportunities on the horizon.
Well, this one breaks the heart. Yesterday, I put in an entry order to go long at 1.1145. The market dropped to 1.1139 but my order was not called due to the 8 pip spread. Yep, it was missed by only two pips. And, I missed out on a 95 pip run! Turns out I was right on time with the AUDNZD but a bit overly cautious this time. So, the question remains, is it too late to enter this trade? Stochs are just crossing and below 20 and we are still relatively near the bottom of the range. But I’m hesitating as I feel I missed the optimal entry. I’m going to think about it and will get back to this board if I decide to enter.
Range traders know that when the market breaks out of its consolidation or range that it usually breaks out in a BIG way. This is why it is critical to always set stops. Now, I asked the question. How can I profit from this knowledge that it breaks out in a big way? Suppose I had placed an entry order at the bottom of the range for GBPAUD. Let’s say I placed an order to buy at 2.3751 and my stop was at 2.3724. All right, the pair trends lower and I get stopped out losing 27 pips. But wait, yes I was clever enough to know that if it breaks, it breaks big. So, I had placed another entry order to go short at 2.3723. Now, look at what actually happened in this case. It dropped to 2.3613 or 110 pips! And, you have the satisfaction of taking revenge on the market for your loss of 27 pips Now, one would need to be careful here. The second order would need to be far enough below the range to avoid market testings or you would get blasted at both ends.
Ok, some interesting developments with this pair. We had a sonic bomb that sent it 80 pips back down to support but the bottom of the range 1.1121 held.
Incidentally, some of you saavy traders may have bought the bounce off of the bottom of the range. Hmmmm, why did I forget to place an entry?
I entered long on this pair primarily because I believe this range is still valid and the bottom 1.1121 is heavily tested. Having survived that test, and with stochs going up, I expect it to continue going up. My not ideal entry was at 1.1170. I placed a wide stop at 1.1120 because this could easily retrace back again. My target is 1.1272 or 100+ pips, but I take a very active role in my trades and will adjust stops and limits as the picture unfolds.
I have moved up my stop to my open at 1.1170 so I won’t lose anything if this turns. Profit is currently at about 18 pips. Doing this may kick me out early of a good trade, but I think if it falls below 1.1170 it’s going the other direction.
This was a great trading lesson for me. No loss or gain due to my stop, but a lot of experience. Last night while I was sleeping, I got close to 50 pips profit, but the pair failed to break resistance at the 62% level or 1.1220. This should have been obvious to me as it had previously tested this level more than once and failed to break it. How can I learn from this? Make sure when approaching a strong resistance level that you at least close out part of your position to lock in profit or you’ll watch it go up in smoke as it retraces. How might I do this without having to watch it manually? If you’re trading 2 lots, open the 2 lots separately with limits near different resistance levels. This in effect will be the same as closing out half of your position at the first resistance level. Am I sorry I placed my stop so high? No way. It’s great learning without losing money.
By the way, I’ll be scrutinizing this pair for another entry point. I’m not through with it yet.
AUDNZD’s range may be short-lived as revealed by the 3 moving averages. Notice how they were crossing before but now 65 is above 20 which is above 7. This is usually an indication of a strong downtrend. We may see this break the other direction in a big way and outside of the range. I am setting a short entry order at the bottom of the range in preparation at 1.1098 with a Stop at 1.1136. That said, I wouldn’t rule the range out yet and I’ll keep watching this for changes.
Congrats guys, it happened. AUDNZD appears to have broken out of its range. As a recap, my trade idea was to place a short entry just outside the range in preparation of a breakout. As I mentioned before, range traders know that when a pair breaks out of its range, it often goes big. So, my short entry order at 1.1098 was called and it proceeded to drop over 60 pips at last check. Yay!
Well, it should be yay! You did get all 60 pips didn’t you? Or, were you like me and let your emotions move up your stop past breakeven so you only exited with 10 pips? I’m sure nobody did that but me. But since I’m using this board for my own accountability as well as to share range trading ideas, I need to ask myself how I could have avoided it. Duh! Don’t move up the stop. Ok, but let’s be honest, you can tell yourself that until you’re blue in the face, but you’ll still do it. Why? Because the profit is staring you in the face. Ok, but how about this for a solution. You move up your stop to breakeven at about 20 pips. Then, when you just can’t take it anymore, profit is staring you in the face, close out half your position. Proceed to hold the remaining portion until it reaches your target. In this case, my target was a 1/28/07 support level. In fact, this is exactly where our pair found support at 1.1050. So, doing it this way we get a profit either way and still make our targets.
Oh, and by the way, the saavy traders actually put a short order in at the 1.1220 resistance level having noticed it tested it but failed to break. They chalked up 183 pips. Nice work!
