Range Trading - How price "respects" old ranges #tatip

OANDA:USDJPY   U.S. Dollar / Japanese Yen
Trading while price is ranging is always one of the most frustrating things for a trader. However a correct identification of a range can help in finding a high quality setup in the future.
How to identify a range:
a. Price tends to slow down and visits previous swing highs and lows in a relatively small space. Those highs and lows create a support and a resistance that are both respected.
b. When drawing the range usually the 50% of the range (Equilibrium) tends to be a level where price moves around it. Using a fixed range VPVR you can see that this is a high volume node or Point of Control.

How to trade the range:
a. When price breaks out of the range it tends to respect the range when it comes back in the future. The range is an area that provides liquidity due to many trapped traders.
b. Range High/Low and the EQ are the levels that you look to trade on the return. EQ is the strongest point.
c. Even if you miss the entry, there is always a second chance. Look for Orderblocks that can help get into the trade or add more to the existing position.
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