Range bound market.

5. Price Action Trading - Range bound strategy.

If the market structure looks like range bound or side ways, we need to remember two things: 1. Resistance levels, 2. Support levels.

As market price traded between the support level and resistance level, it doesn't mind the psychological levels ( round numbers ) and patterns as much.

We can expect a big move if the market breaks the range bound prices or else, it will be traded within the range.

We can buy the stock or options if the price is at support levels and we can sell the stock or option if the price is near to the resistance levels.

If the market opens gap up and near to resistance levels, then we need to wait until it makes a inside or rejection candle for the confirmation to short the stock or option.

Ex: As the bank nifty is opened gap-up and nearby to resistance levels, so it may definitely come to fill the gap, after the first rejection candle as a confirmation, we can go short here.

As we can see in the below image, bank nifty filled the gap and making lower lows formation till support or supply zone.
In Range bound market, support and resistance level will act as magnet on both sides. We need to keep an eye on the middle line where market takes support or resistance to reach the upper level or lower level of the range.

I hope the above information is helpful.

Happy trading :)

Comments

Difference between BOS and CHOCH?

BoS = Break out Structure. CHoCH= CHange of CHaracter.

Symmetric triangle pattern breakout.

6. Price Action Strategy - Short term counter trade and symmetric triangle pattern. We all know that if the market makes a symmetric triangle pattern and gives a breakout, then it will take a re test to make higher high. All we know is this, but the fact is even if it gives a breakout at triangle pattern, we need to check if there is any major and strong resistance levels nearby. We will check this example of SBIN and find out the real truth of the market. In the above image, we can see the SBIN is given a breakout of the symmetrical triangle pattern and took the retest. Every retailer will wait for the re rest to enter in a low price. As we can see in the above image, the market is at major resistance levels, so it may not go up ward and it may surely hit the stoploss of the many retail traders. As we are trading in SBIN, we can check Bank nifty for double confirmation whether the stock will go down or not. Main two confirmations: SBIN is facing major resistance levels, Bank Nifty

Liquidity Models

🔹 Liquidity is like fuel to move the market in a specific price zone. 🔹 We can find liquidity in zones where a lot of people set their stop losses and buy/sell stops. 🔹 The market makers will manipulate the price to break these obvious zones and take the liquidity. 🔹 These are the most common liquidity patterns.

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