A range is a market condition where an asset’s price moves sideways within a defined support and resistance level, without establishing a clear trend.
Understanding ranges helps traders identify consolidation periods and potential breakout points. Trading within a range allows for strategic buying and selling opportunities.
For example, if USD/JPY fluctuates between 145.00 and 147.00, traders may buy at the lower boundary and sell at the upper boundary until a breakout occurs.
Test your knowledge of ranges in forex trading with the following questions:
