What is range bound trading?

Range Bound Trading is a technical analysis that predicts the short term highs and lows of a stock. It helps traders and investors to plan when to buy or sell the stock. Range Bound Trading closely monitors the stock range as any change can affect the price. Range Bound Trading finds the major support and resistance levels with technical analysis.

What is a range-bound strategy?

Range-bound strategies refer to methods by which traders capitalize on a market that’s moving sideways — also known as a sideways market. For example, users trading in sideways conditions will repeatedly buy an asset low at the support level, and then sell it high at the resistance level. How Does A Sideways Market Work?

What is a range in stock trading?

Ranges occur when the price of a stock is bound between an upper ceiling ( resistance) and a lower floor ( support ), which it can't break through. The price channels back and forth between these areas establish the price range. In hindsight ranges can look easy to trade, but don't be fooled.

What happens if a stock breaks a trendline?

The stock's breakout from upper trendline resistance marks an end to the range-bound trading. Support and Resistance: If a security is in a well-established trading range, traders can buy when the price approaches support and sell when it reaches resistance.