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2008issue C041-4

Construct a range-trade hypothesis from a price channel

A range is constructed as price movement between an upper resistance boundary and a lower support boundary. A range-trade procedure sells near the upper boundary of a price channel and buys near the lower boundary, on a time frame no smaller than hourly and preferably at least 30 pips wide.

  • A range is constructed as price movement between an upper resistance boundary and a lower support boundary.
  • A range-trade procedure sells near the upper boundary of a price channel and buys near the lower boundary.
  • A usable price channel should be identified on a time frame no smaller than hourly and preferably at least 30 pips wide.
  • Editorial reading: record those bounds, the time frame, and the preferred width as one falsifiable range-trade hypothesis.
Entries in this reading3 entries
Current trackRange trading13 readingsPrice channel85 readingsSupport and resistance227 readings

Build the range from support and resistance

A range is constructed as price movement between an upper resistance boundary and a lower support boundary.

Support and resistance are the two sides of that construction. They become the upper and lower boundaries of the price channel.

State the range-trade procedure

A range-trade procedure sells near the upper boundary of a price channel and buys near the lower boundary.

Choose a usable time frame and width

A usable price channel should be identified on a time frame no smaller than hourly and preferably at least 30 pips wide.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
8 of 11 in the Range trading track
201010-13 pp.Next on Range tradingMechanical range trading with a global account stopRange trading harvests repeated crossings inside a predefined price band; grid spacing places sell orders above the market and buy orders below it at a pip interval that can be adjusted by currency pair.
All readings on this track · 11 readings
  1. 1991Constructing Wyckoff readiness tests at range edges
  2. 1992A flat moving average as a range regime switch
  3. 1992A range-reentry case study with a shared adverse-excursion stop
  4. 1993Congestion boxes, edge candles, and the opening hour
  5. 1998Moving-average cross, range mode, and stop-reversals
  6. 2003When range regimes favor swing procedures over trend holds
  7. 2007Dollar range in a data-dependent rate regime
  8. 2008Construct a range-trade hypothesis from a price channel
  9. 2010Mechanical range trading with a global account stop
  10. 2015A quiet gold ETF range as a three-layer classroom problem
  11. 2016Regime-matched rules instead of price forecasts
By fieldTrend and channels228 readingsBy year2008150 readings
All 13 readings tagged Range trading
Also on Range trading5 readings
1991Constructing Wyckoff readiness tests at range edges2003When range regimes favor swing procedures over trend holds2007Dollar range in a data-dependent rate regime2015A quiet gold ETF range as a three-layer classroom problem1992A flat moving average as a range regime switch