Trading in a ranging market is one of the easiest ways to make money, in all the forex sessions, the Asian market is the one that ranges often. It is a good time to make some quick bucks.
But it would require all you have learnt till date.
Remember the candlestick anatomy, your support and resistance levels? If you don’t, now might be a good time to revisit those lessons to sharpen up, believe me, you need them.
In a ranging market, your support and resistance points are essentially the edges of the range.
In this Image, your support line is the red horizontal line below while your resistance line is the horizontal line above.
Once you identify the market is in a range, draw these horizontal lines to serve as a guide in your subsequent decision-making process.
Having determined this, your next decision is to wait for a candlestick formation that is an engulfing bar.
Above is a bullish engulfing bar, do you remember the bearish engulfing bar?
In a ranging market, you want to place a buy order as the market reaches the support area depicted by the red horizontal line you have drawn, but for added safety, you wait until a bullish engulfing bar engulfs.
You take your profits, once the market reaches the resistance point at the top. Cool money.
Now you can wait for a bearish engulfing bar, something like this;
Now you can again sell from that resistance point, and take your profits at the support area.
Sounds cool right?
Except, the edges of a range are not constant. Do not panic, that indeed is a good thing, because the edges which in this case forms our support and resistance is not constant, it tells a story of how strong a resistance or support level is.
Now, having learned about support and resistance, and trends and how trends change, let us know in the comments or Q/A section what kind of story you think these moving edges tell.