What is Range Trading?
Range trading is one another trading strategy followed by traders trading stock, futures and forex currencies to profit from market. Range trading is predominant in forex market, where the high liquidity, as a result of its trading volume, in the market helps range traders to better execute trades. Range trading is different from trend trading and the traders trade irrespective of the trend believing that the price will always return to a trading range.
Range trading is an easy to follow strategy, that requires a different money-management style. The range traders do not look for precise entry and exit points, but they get in the market and try to profit from what ever situation may be. They do not over relay on leverages, as utilizing high leverages can cause margin calls, especially when the price is moving away from the range.
Range traders buy financial instruments when their prices drop to lower supporting levels and sell them on approaching higher resistance levels. Thus the most wanted feature that one range trader’s trading software is the signal generating ability on approaching supporting and resistance levels. The advantages of range trading involve simplicity and non-directional behavior. The disadvantages include the need of more money, need of liquidity in market and trading discipline.
Range trading is an easy to follow strategy, that requires a different money-management style. The range traders do not look for precise entry and exit points, but they get in the market and try to profit from what ever situation may be. They do not over relay on leverages, as utilizing high leverages can cause margin calls, especially when the price is moving away from the range.
Range traders buy financial instruments when their prices drop to lower supporting levels and sell them on approaching higher resistance levels. Thus the most wanted feature that one range trader’s trading software is the signal generating ability on approaching supporting and resistance levels. The advantages of range trading involve simplicity and non-directional behavior. The disadvantages include the need of more money, need of liquidity in market and trading discipline.
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