📊 Understanding the Range Bound Market
In the trading world, we often hear about the Range Bound Market, or the market that moves within a specific range between support and resistance.
🔹 What is a range-bound market?
It is a market that does not have a clear upward or downward trend, but rather the price moves up and down between defined levels:
Support: The lowest price level that the price often rebounds from upwards.
Resistance: The highest price level that the price often rebounds from downwards.
🔹 Characteristics of a range-bound market:
✅ Repeated price movements between support and resistance.
✅ Trading volumes are often stable without significant price explosions.
✅ Suitable for buying at support and selling at resistance.
🔹 Trading strategies:
1. Trading within the range: Buy at support and sell at resistance.
2. Using indicators: Such as RSI and Stochastic to identify overbought or oversold points.
3. Exercising patience: Do not attempt to follow any small movement outside the range before confirming the breakout.
🔹 ⚠️ Tips:
The range-bound market is not suitable for everyone, especially traders who prefer fast and sudden movements.
Always set a stop-loss to avoid unexpected losses in case the price breaks out of the range.
✨ Summary:
The range-bound market is an excellent opportunity for short-term trading if you understand support and resistance and use clear strategies.