Range trading is the best trading strategy which is most easy to understand. It’s just like a simple support & resistance. As we had learned in previous chapter that market makers/ whales makes us fool by dragging price or by making false breakout. In this chapter we will learn how to ride with the Liquidity & not to become a Liquidity.

The bitter truth is that all the basic patterns we have learned before are all created by those institutions so that retail traders apply those patterns & trade according to that patterns due to which whales or institutions so called get a chance to grab all the Liquidity & stop losses of retail traders. Now lets see how we can play safe & how we can take profits from this cruel market.

Formation Of Range:

There are three levels of range, the upper level is called Range High, the lower level is called Range Low & the mid level of these Mid Range (0.5 level of fib).

Range occurs after an up or down impulsive move. After an impulse move

(up/down), the first high is marked as Range High & first low is marked as Range Low & the mid of them as Mid Range.

After the impulsive move(up/down), when first low or high is swept before rejection or bounce.

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Or the first low or high made are not swept before the rejection or bounce rather they are swept after the price rejected or bounced.

Always take most isolated high & low as Range High & Range Low. Identify High & Low on higher time frame (4hr/daily).

Trading The Range:

This was all about how to draw a range, now we will talk about how to trade the range setups. Range can be formed in all timeframes but the best strategy is to look for range formation in Higher timeframes (4hr/daily/weekly). Shorter timeframes (15min/30min/1hr) are used for confirmation for entry.

There are 4 key elements or steps to trade a Range:

1. Direction Of Trend:

First we will look for our trend direction whether it’s uptrend or downtrend in HTF.

2. Formation Of Range:

Then we will look for formation of range at whatever point it appears that a temporary top or bottom (high/low) has been put in. And after that a low or high has been formed. Then we will form our Range.

3. The Sweeps:

As we have talked about liquidity in our previous chapter, the retail traders put their stops above or below these highs/lows, the whales/institutions will try to sweep or grab those stops. So to add more validity to our range & to begin look for setup, we want to see the sweep of range high or range low.



4. The Entry:

This is the main part of our Range, after the sweep of Range high/low, we can enter the trade when candle closes back in Range(in higher timeframe candle closure inside the range is must). This is risky to enter direct after the closure so for more confluence, we will wait for the confirm Break Of Structure in lower timeframe.

5. The Target & Stop loss:

After the successful Bos, we will enter the trade by putting our stop loss above or below sweep & we will target Mid Range or previous lows/highs liquidity or opposite range(low/high).

Lets have a look with live example:

Formation Of Range:

Sweep Of Range:

Bos In Lower Timeframe & Entry With Targets & Stoploss:

Now again lets go for another revision:


Lets see in downtrend:

NOTE that these ranges are not only formed in trends but there are some other ranges that are also important too & should be drawn on the charts just like Monthly Ranges, Weekly Ranges & the most important is Monday Ranges.

Monday High & Monday Low are also drawn like these Range High & Range Low, it’s trading concept is as same as like these above concept.

Whenever Monday high & Monday Low is formed they should be marked, whenever the price sweeps any of the range(Monday high/low) & candle closes back in range, enter the trade with Stoploss beyond the sweep & target mid range or opposite range.

Also remember that as before I said, trading is totally the game of probabilities. Nobody can predict the market move 100% accurate but by using all the concepts you’ve learned, you can predict 60-75% accurate.

Whatever you do, if you take 10 trades, 4 trades will hit Stop loss surely. So always manage your Risk & have a control on your emotions because we are human being & we are full of emotions such as greed, fear, excitement etc.

Related Queries:

  • Ranges
  • Range Trading
  • Formation of Range
  • Range High
  • Mid Range
  • Range Low
  • Impulsive Move
  • Trading The Range
  • Direction Of Trend
  • The Sweeps
  • The Entry
  • Stop Loss
  • Take Profit
  • Monday Ranges
  • Weekly Range
  • Monthly Range
  • Monday High
  • Monday Low

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