If price ranges in a S/R zone for a longer period of time. …which probability is more ? bouncing or breaking the zone
If we knew the answer to that one, we’d all be rich.
Trade the range & it’ll probably breakout.
Trade the breakout & no doubt it will be a false break & go back in to the range.
Currency pairs can range for a considerable period of time so it’s just a case of being prepared for both & watching the price action etc for an indication of what might occur.
Check for news releases too as it may take something like that to kick a bit of volatility & movement in to the market.
Hello Godzilla
As long as the trend remains in tact, trade what you see not what you think. Of course the age of a trend, or the age of the range, does lower the possibility of it’s continuation, but the question of WHEN will the trend change direction, can never be answered. (Cycle analysis might help but i personally think it is too theoretic)
Trading something that did not happen yet, is the same as taking a left turn blindfolded, it is guess work.
If the age of the range/trend is old and you are hesitant to trade it, in that case, simply adopt a passive approach and wait for it to happen!
At any given moment, I think bouncing is clearly more probable than breaking, since (by definition) for it to have become an identifiable “zone” at all, there must be considerably more bounces than breaks. That’s what a “zone” is, after all, isn’t it? 
[QUOTE=“lexys;715413”] At any given moment, I think bouncing is clearly more probable than breaking, since (by definition) for it to have become an identifiable “zone” at all, there must be considerably more bounces than breaks. That’s what a “zone” is, after all, isn’t it? ;)[/QUOTE]
Agreed. The bounce within the range is probably statistically more plausible & even if the the support/resistance did break, false breakouts are very common & price will pull back to the range.
That said: anything can happen so have your SL in a logical place to protect yourself.
Indeed … the expression “Turtle Soup” (as Linda Bradford Raschke put it) comes to mind …
Nice answers, Lexy, Baz, and Oceanmen…
Godzilla, hello again! I see that you are keeping up the habit of asking enigmatic questions :))
Every pair goes through an accumulation / consolidation phase, where a balance of buyers and sellers keeps price locked in a range/zone… As someone who trades trends, rather than breakouts or ranges, I am not really able to suggest strategies, but, as Baz said, if we knew the answer to your question then we could all get rich :))
Hi there!
There are two types of strategy: for bouncing and breaking through. Every case is individual. One cannot know for sure for each situation will it be bounce or break through. You should just choose your strategy and follow it.
Well that’s where other technical indicators, candlesticks, and fundamental analysis will come in!
My 2 pence. General rule with a bit of fundamental analysis which I personally avoid .
If there was no ‘game changer’ event – continuation.
‘The market in motion is more likely to continue than to reverse’
If there was a ‘game changer’ event expect a reversal , after couple of attempts of stops hunting ( or false break outs as some prefer to call them) 
#TradeSafely
[QUOTE=“FXZOO;716319”]My 2 pence. General rule with a bit of fundamental analysis which I personally avoid . If there was no ‘game changer’ event – continuation. ‘The market in motion is more likely to continue than to reverse’ If there was a ‘game changer’ event expect a reversal , after couple of attempts of stops hunting ( or false break outs as some prefer to call them) #TradeSafely[/QUOTE]
Did you just apply Newton’s first law of motion to trading? I like it!
Inertia: an object at rest tends to stay in rest and an object in motion tends to stay in motion in a straight line at constant speed unless acted upon by an external, unbalanced force.
Me too … I’m wondering, now, whether they might all apply? Newton’s [I]second[/I] law of motion: “the retail traders go one way and the price goes the other?” :eek:
When one has large enough financial backing,taking out the range highs or lows to trigger stops and fundamentally change market perception is generally the most profitable strategy.
You can be certain that one large players have ascertained the stop losses are worth going for, the range will be broken.
January EUR CHF…
i agree if we know the exact answer of this ques we would have been so rich by now. however, not exactly but to just some extent we can guess or predict where the price can go based on the different technicalities, historic price actions and most important the news and announcements. major events and news impact it to a great extent so it need to be observed keenly.
I picked that rule years ago and it is one of my favorite ever since. Dynamics of the price/trend follow the Newton’s rule,especially the 2nd one;)
‘if not in balance , Market trades against positions!’
#keepitsimpledorothy!
Hi Godzilla,
Price ranges in a S/R zone for a longer period of time
is only indicative of STRONG S/R. Base on this alone,
there just isn’t enough information to determine if the price will bounce or breakout.
Nonetheless, my gut tells me, go for the bounce.
However, just be mindful that a false break is also a possibility, and that is the “Killer”.
I see that some of you have misunderstood my question…So I am posting my question with a chart now.
This is a Daily chart (// please don’t ask me the name of the symbol …no fundamental view required)
see the highlighted area…thats a support area …and price is stuck there for a long time …and not moving much.
Which probability is more there ? price bounce or price going down ?
I know there is no definitive answer. But I am asking in terms of probability.
As explained on the previous page, [I][U]at any given moment[/U][/I] the probability of a bounce is greater, [I]by definition[/I], just because statistically there are many bounces within a zone for every escape from the zone. That’s what a zone [B]is[/B], isn’t it: it’s an area on a chart within which there are many bounces?
I don’t see that, myself. To me it appears to be a perfectly straightforward question with an equally simple answer, to which some respondents have then added some additional thoughts, as will understandably happen in forums.
still need to know the pair. That does matter, or its not relative of what could happen.
When you start looking into Probability, is when you may as well just throw a dart.
Just sayin…
I [I]hope[/I] you mean it ironically/sarcastically? Probability is what trading is about. Without having probability on her/his side, no trader can have an [I]edge[/I], and without an edge, there are no profits. Probability is really what an edge [B]is[/B].
There’s never any certainty about the outcome of any individual trade, of course, but that isn’t what the OP was asking. Situations like the one he asked about relate to [I]collective[/I] probabilities. As far as I know, nobody has yet discovered a way of trading profitably without the [U]collective[/U] favourable-outcome probability of the [I]types[/I] of trades they’re taking being in their favour.