Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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What is Range in Trading? Technical Analysis

Forex Educational Video Series

Author: Andreas Thalassinos (BSc, MSc, MSTA, CFTe, MFTA), Head of Education at FXTM.

What is Range in Forex Trading?

We’ve gone through both uptrend and downtrend, so now let’s look at an example of when the market isn’t going up or down. When the market appears to be ‘trending’ sideways, we call this a range. In fact, since there appears to be no apparent trend, another term used to describe this type of market is: trendless. 

In a range, the action of the price is confined within the boundaries of support (bottom) and resistance (top) lines. On closer inspection, one notices that the highs of the tops are approximately equal to each other, as are the lows of the bottoms. A range is more likely to break out either above the resistance or below the support. 

Where trend-following traders put a lot of weight on uptrends and downtrends, range traders focus on ranges. Range traders identify support as oversold levels of their instrument, and resistance as the overbought area. Their tendency is to buy at the oversold, or support, level and sell at the overbought, or resistance, level.

That’s range in a nutshell! See you soon for the next video, traders.

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.

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