How to trade in and out of a sideways range?
ที่อัปเดต:
Horizontal price movement is seen when the powers of demand and supply are roughly equal, thus forming a "sideways trend". This usually occurs during a period of consolidation before the price continues a prior trend or reverses into a new trend. A sideways trend is also sometimes referred to as a "horizontal trend".
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An important indicator is volume, which usually remains flat during a sideways trend as the bulls and the bears balance out each other. A surge in volume is seen when the breakout or breakdown is expected to occur.
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Ways to profit from a sideways trend :
1. Typically traders will try to capitalize on breakouts or breakdowns, to try and ride the momentum in the direction of the break, thus generating profits. But breakouts are prone to failures, so a more prudent approach can be to wait for a re test of the level price broke out from and then initiate the trade.
2. If the price regularly rebounds from the support and resistance levels as can be seen in the chart, traders may try to buy the security when it nears the support levels and sell it when the price nears resistance levels.
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Now, as we can see that the price of IGL was bouncing around in the sideways channel. It failed to move past 545 on 09.04.21 and 11.06.21. Similarly it bounced back from 500, at 5 occasions, on 25.03, 06.04, 19.04, 30.04 and 21.05.21. It finally broke out above 545 with above average volume on 29.06.21 and soon made a high of 584.
It travelled almost the width of the range after breaking out as is expected. And then it started pulling back and has touched the top of the range. A continuation candle with strong volume has occurred now.
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A long can be initiated with the following levels in mind if the price sustains above the "LONG ABOVE" level for 15 minutes.
LONG ABOVE: 548.70
STOP LOSS: 534.80
TARGET 1: 562.60
TARGET 2: 576.50
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Trade your plan and manage your risk effectively.
Like and follow for more. :)
_____________________________________________________________________________________________________________________________
An important indicator is volume, which usually remains flat during a sideways trend as the bulls and the bears balance out each other. A surge in volume is seen when the breakout or breakdown is expected to occur.
_____________________________________________________________________________________________________________________________
Ways to profit from a sideways trend :
1. Typically traders will try to capitalize on breakouts or breakdowns, to try and ride the momentum in the direction of the break, thus generating profits. But breakouts are prone to failures, so a more prudent approach can be to wait for a re test of the level price broke out from and then initiate the trade.
2. If the price regularly rebounds from the support and resistance levels as can be seen in the chart, traders may try to buy the security when it nears the support levels and sell it when the price nears resistance levels.
_____________________________________________________________________________________________________________________________
Now, as we can see that the price of IGL was bouncing around in the sideways channel. It failed to move past 545 on 09.04.21 and 11.06.21. Similarly it bounced back from 500, at 5 occasions, on 25.03, 06.04, 19.04, 30.04 and 21.05.21. It finally broke out above 545 with above average volume on 29.06.21 and soon made a high of 584.
It travelled almost the width of the range after breaking out as is expected. And then it started pulling back and has touched the top of the range. A continuation candle with strong volume has occurred now.
_____________________________________________________________________________________________________________________________
A long can be initiated with the following levels in mind if the price sustains above the "LONG ABOVE" level for 15 minutes.
LONG ABOVE: 548.70
STOP LOSS: 534.80
TARGET 1: 562.60
TARGET 2: 576.50
_____________________________________________________________________________________________________________________________
Trade your plan and manage your risk effectively.
Like and follow for more. :)
ปิดการเทรด: ถึงเป้าหมายการทำกำไร
Target 1 at 562.60 reached today.ปิดการเทรด: ถึงเป้าหมายการตัดขาดทุน
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