1. JAPANESE PRICE RANGE:

With a rectangular range, the price moves sideways between the upper resistance and lower support, which is almost horizontal. These range of price ranges are common in all timeframes, although they are not as common as ongoing price channels or ranges (see below). We can easily spot rectangular ranges on a chart visually or with indicators. The rectangular range is usually confirmed by the following factors:

  • The formation of clear support/resistance zones.
  • Flattened moving averages (The moving averages depend on the time frame)
  • Peaks and lows are on a flat horizontal price area
  • Indicators often diverge with prices at the extreme points (Highs / Lows) of the range.
  • The reversal signals usually appear (Pinbar candles, Doji, 2 highs, 2 lows).

How to trade with sideways price ranges:

Trading with this range of prices is quite simple, we have no choice but to sell and buy at extreme points (High / Low) or wait for signals to reverse. appears around this extreme region. The stop loss can be set according to the ATR, or a fixed number above/below the top/bottom depending on the degree of volatility during the day.

2. CHANNEL RATE RANGE:

Price channels are another popular form of range in the market. These simply range forming along diagonal lines. With this type of range, the price rises or falls within a steep trend channel of varying widths.

Channels can last for a very long time, sometimes years, and it represents a trend. For this reason, we can trade with a trend or breakout strategy.


How to trade with cross ranges:

With this type of price range, we have 2 ways of trading as mentioned above:
  • Buy/sell at an extreme price channel: This is a simple swing strategy, but we should prioritize following the trend of the price channel. If the price channel is sloping up, you should prioritize a higher volume when buying at the bottom of the channel and decreasing the volume when selling at the top of the price channel and vice versa.
  • Breakthrough Trading: A break-through trading strategy is a strategy to wait for prices to close above a downward slope or below a steep up the channel to trade. Of course, we can either trade or wait for the price to break the nearest high / low or pull-back to the edges of the price channel.
  • One more effective strategy when trading with the price channel is to wait for false signals to break out of the channel, then prices often reverse and return to the original price channel:
3. SCOPE OF DIRECT PRICE:

Continued price ranges are chart patterns that typically appear in the middle of a trend. These include bunting, flag, wedge, and triangle. This type of range usually marks a correction from the main trend. They can be bullish or bearish. The identifying feature of this type is the bundle price in a very narrow range

This kind of range can happen at almost any length of time. We can use either a range or break trading strategy - depending on the timing of your trade. However, these patterns can produce strong bullish or bearish breaks as the prevailing trend continues, so we should trade breakouts rather than a range.


How to trade with continuation ranges:

There are 2 ways to trade with continued ranges:
  • Buy up / sell at the extreme of the range
  • Trade when the price breaks out of the range.
In fact, ranges of continuation ranges are often narrow, so surfing on extreme zones is usually not as profitable as trading trends. Therefore, when determining the continuation ranges (Flag pattern, bunting tail, triangle, ...), you should make a break trading strategy!

4. EXCEPTIONAL PRICE RANGE:

This is a common type of price range, but it can be difficult to trade. Their name says it all, it's "PERFECT".



Here's an example of such a price range, with this kind of price range the price often moves in ambiguity. And with this kind of price channel, brothers are not allowed to trade around extreme points, but instead, trade on pivots.

Above are 4 price range categories. We know how to work out the most suitable trading plan. With the horizontal channel, trade around extreme points. With the cross channel, you can buy at the top of the channel, sell at the bottom of the channel, or trade a false break or break. With range continuation, you are better off trading a break instead of a range trade (Continued range areas are often narrow). As for the irregular price ranges, you can skip trading or using the pivot point tool!

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