The Dog days of Summer and Trading Ranges
During the months of summer in the northern hemisphere, many traders are on vacation and trading tends to slow down and become more range bound.
I think for many traders the last few days have been frustrating in that many follow the old saying of "the trend is your friend" Trend trading is how most retail traders trade. But, over the last few days we have not been trending. In fact many pairs are stuck in Ranges. So what do we do now? Do we take the Summer off and wait for trends to develop again. Absolutely not. Unless you are already successful and only trend trade then enjoy your holiday and see you in the Fall. But for most we need to work so as traders we trade. Most traders should already know what a range is. But here is a quick definition.
A range is When price is trapped between an upper Horizontal line Resistance and a lower Horizontal line of Support over a prolonged period of time. Here is an example. GBPUSD 1 hr Chart
I think for many traders the last few days have been frustrating in that many follow the old saying of "the trend is your friend" Trend trading is how most retail traders trade. But, over the last few days we have not been trending. In fact many pairs are stuck in Ranges. So what do we do now? Do we take the Summer off and wait for trends to develop again. Absolutely not. Unless you are already successful and only trend trade then enjoy your holiday and see you in the Fall. But for most we need to work so as traders we trade. Most traders should already know what a range is. But here is a quick definition.
A range is When price is trapped between an upper Horizontal line Resistance and a lower Horizontal line of Support over a prolonged period of time. Here is an example. GBPUSD 1 hr Chart
From looking at this it is obvious that you can not trade this as a trend trade. So how do you trade this? There is a technique I have been taught that is very profitable. Learnforexlive(Now ForexKnights) and Forex mentor pro is where I have learned how to trade this pattern. I will give you a hint if you have not already figured it out it is Breakout trading. But it is not just bracketing the upper and lower bands. If you do that you will be eaten by fake breakouts like we saw yesterday on the GBPUSD. Lets look at another example.
Here is a range on the AUDJPY daily chart.
This pair is also range bound But hey it is a 300 pips range. Do we need to wait for breakouts here too before we trade. There are two methods to this one and you can learn them just as I did. One is the Breakout and the other method is to trade the Bounce. Go look where I learned and take your trading to the next level and be able to trade under any conditions. Trends, Ranges, Reversals,Trend Collapses. Anything the market sends you. You will have a Strategy. Here again are the Two Mentoring sites where I learned how to trade Ranges. Good Luck go check these sites out and take your trading to the Next level. A winning level so you can take those summer months off and enjoy.
Again Good luck today.
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