FOREX THEORY
Bollinger Bands in a Ranging
Market (Part 2)
By buying near the low price, the
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. Popular tools
to use are channels such as the one shown above and Bollinger bands.
Using oscillators, like Stochastic
or RSI, will help increase the odds of you finding a turning point in a range
as they can identify potentially oversold and overbought conditions. 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 pair
for trading ranges is the EUR/CHF. The similar growth rates shared by the European
Union and Switzerland pretty much keep the exchange rate of the EUR/CHF stable.
 By buying near the low price, the trader is hopi...){kind=link}
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