Which currency pairs are best for trading range-bound strategies?

Here’s an example using GBP/USD. Bonus Tip: The best pairs for trading range-bound strategies are currency crosses. By crosses, we mean those pairs that do not include the USD as one of the currencies in the pair. One of the most well-known currency pairs for trading ranges is EUR/CHF.

Are all currency pairs the same?

Not all currency pairs have the same behavior and characteristics. In general, crosses have a better chance of sticking to ranges, often narrower range than the majors or minors. However, not all crosses are the same. Here are a few things to watch out for. This is the third article in the serious about range trading.

What happens when the forex pair is ranging?

When the Forex pair is ranging, we have no trend, which could be traded, and we may experience false breakouts and whipsawing price action. Also, the price action is accompanied by low trading volumes which makes gauging market direction more difficult.

What is a range-bound trading strategy?

The basic idea of a range-bound strategy is that a currency pair has a high and low price that it normally trades between. By buying near the low price, the forex trader is hoping to take profit around the high price. By selling near the high price, the trader is hoping to take profit around the low price.