Ranges contain elements of certainty which are rare in a speculative industry. With previously established highs and lows, you can anticipate where the market is likely to hold, change direction or stop all together. 5 interesting facts about range patterns when charting price action. 1 - The range pattern is good for traders who are terrible at cutting their losses. The nature of a range is to not make progress in one direction, so this is the best pattern to trade if you don’t like taking your stops. If the market moves against your open trade during a range, your patience may be rewarded, because chances are price will swing back in your direction. 2 - Ranges contain areas where you can expect momentum. That sounds like a contradiction, right? It's not. You can expect the typical slow market condition in a range, but only in the middle third of the range space. Count on momentum showing up when it runs to and from the outer edges of the range. 3 - Past performance predicts future movement. You’ve heard it - you’ve probably even said it - “Past performance is no guarantee of future results.” However, when it comes to range patterns, I keep track of where price has been in the past 15 bars. Do the math because that’s exactly how far you can expect price to move in the opposite direction in the next 15 bars. 4 - After a trend, it only takes 7 bars of time in the range pattern to tell me which direction is coming next. Add the 50 simple moving average to your chart. If price crosses that line and stays below it for more than 7 bars, it’s probably not going to return to the trend any time soon. 5 - The best range trades happen when your expected high or low is suddenly obliterated. Huh? It's true, and this is my secret weapon in trading. If price breaks out of a well established range pattern, immediately place pending orders to trade in the opposite direction. If price fails the breakout (which it usually does), it comes barreling back through the range pattern, and those trades move into profit very quickly.
And let me guess...you are providing this information out of the goodness of your heart? Hardly! You just want to sell an indicator that someone can add to the others that do not work. Vultures!
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@faith_defender, I appreciate your concern. I am independent of the sales side of TSG. I was hired to just blog posts here at TV. Many of my posts relate to my personal strategies that TSG doesn't offer an indicator for. Even the indicators that TSG offers, I do not make a trade totally dependent upon what the indicator tells me. I find they help me filter through charts to find trade setups but then I personally evaluate the trade upon many personal factors, like daily trend - chart structure - sup-res - chart and price patterns. TV offers many other peoples blog posts that help teach a trader what they need to learn to help create their own trading plan. I am grateful there is a place that we can have that opportunity TV offers to us as traders. I have faith in their believe they are creating that place and I choose to defend their choice to let everyone share their thoughts. Thank you for yours.