Wednesday, August 23, 2017

My Forex Range Trading System Revealed

March 23, 2010 by  
Filed under Fx Tutorial


What exactly is range trading? You may be wondering. If you have been looking at your forex chart, you will find that there are times where you will see the price moving within a trend channel. When the price is within a channel, we say that it is moving in a range bounded by an upper resistance and a lower support level.

So How Can You Trade The Range?

In this post, I will be sharing with you how I do range trading whenever the market is moving sideways or within a range.

Below are things you need in order to trade the range

1) Identify the Trend Channel: This is the number one thing that you must see in order to trade the range. Do remember to draw a resistance and support line of the trend channel you have identified.

Identify The Trend Channel

2) Setup your RSI or Stochastic: These 2 indicators are known as oscillator as they can help traders to identify whether the market is oversold or overbought.

3) Setup Your MACD Indicator: The MACD indicator can be a good tool to help double check whether the price will breakout of the range or will most likely stay within the range.

RSI and MACD

With all these setups and the range identified, all you have to do is to watch out for the price to go near the support and resistance lines that you have drawn.

When the price goes near the resistance level, you should take a look at your oscillator to check if the market is currently overbought. If your oscillator shows you that the market is indeed overbought, you should then move on to see your MACD to check if a bearish crossover is going to occur.

If all conditions are met, you can then enter a SHORT trade to grab the profit as the price is going to be repelled by the resistance level and continue to move in the range.

If you see the price going near the support level, you will then do the same as above but you will be looking out for the oscillator to give you an oversold signal and the MACD to give you a bullish crossover.

Forex Range Trading Tutorial

If you are interested in trading this range strategy, you can now try this out on your demo account and then fine tune them to suit your trading style. Once you are able to produce consistent profit from this range trading strategy on your demo account, you can then move on to trade in your live account.

Note to Readers

Do note that the above strategy is a general strategy that has not been fine tuned. In order for you to trade with it, please fine it tune on a demo account. If you do not know how to fine tune a strategy, please read the below

http://www.forexindicator.org/how-to-formulate-your-own-forex-strategy.html

For those of you who are new to trading, you can read my blog post on forex trading guide for beginner

Remember: Do not rush into trading LIVE with any forex trading strategy that you learn. They must be tried out in demo account as it allows you to familiarize with it so that you can trade profitably with it.

 

Comments

13 Responses to “My Forex Range Trading System Revealed”
  1. Syed Moheudin says:

    Hello kelvin,

    Thanks for your useful website content. I am greatful to you I have learn a lot.

    I did not undrstand the difference between channel trading and swing trading, could you please discuss the difference a bit better way.

    • Kelvin says:

      Hi Syed

      Channel trading is in fact a form of range trading. It only happens when the market is in the period of consolidation.

      As for swing trading, it need not be a form of range trading. It can also happen as a reversal trading.

  2. Satish says:

    Hi Kelvin
    Which broker and tranding platform do you use, where
    I can see both trend lines, blue as well as red trend
    Lines on MACD.

    As I use MT4 trading platform with FXDD, I only see
    One trend line with MACD.

    I will feel more comfortable trading with two trendlines,
    As it will make it easier for me to know when to buy
    Or sell.

    • Kelvin says:

      Hi Satish

      It does not matter which broker to use. As long as you are using MT4 platform, you will only have one trend line. Dun worry, instead of using the 2 MACD lines crossover, you can use the histogram flip. When 2 lines crosses down, the histogram will flip down. When 2 lines crosses up, the histogram will flip up.

  3. Satish says:

    Hi
    I just like to know, when I set up MACD on my trading chart on default setting
    I see the red trend line and not the blue.
    Using only the red line will make it impossible to see when
    There is a crossover or buy or sell.

    Please let me know where my mistakes are.

    • Kelvin says:

      Hi Satish

      This has got to do with your forex broker platform. Some platform has only one line for the MACD. However do not worry, you can still see the crossover via the histogram bar. When there is a bearish crossover, the histogram will flip down. When there is a bullish crossover, the histogram will flip up.

  4. Van says:

    Kelvin,
    Very happy I found your website. Thank you for providing so much great info. Can you please tell me what your RSI setting is? I use the 3 min charts to time my entry/exits. Thank you.

    Van

  5. andrea says:

    Hi Roy, I too have found your information to be very helpful. My questions are:

    1.What time frame have you found to be the most profitable to use for trading? 2.I use the CCI for my oscillator. Should I use the macd as well?
    Together will they strengthen my decision power?

    Looking forward to hearing from you.
    ~Andrea

  6. Jibola says:

    Thanks a lot Kelvin for this profitable system. Pls what’s d settings for d MACD and those 2 lines on it. Or are they stochs? Your comprehensive explanation will be appreciated.

    • Kelvin says:

      The MACD setting for me is 8, 24, 10 but this strategy also work for the default setting as well.

      Glad that you find this strategy useful for you.

  7. roy says:

    This strategy is the most profitable and works 70-80 percent of the time. MACD and RSI/Stochastic, combined with EMA or bollinger band is even better.

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