Identifying Buy And Sell Zones: Part 1

Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.

Regardless of your preferred trading strategy, it is essential that we as traders are able to identify buy zones and sell zones. I use trendlines and horizontal lines to do this. I will be doing a series of articles on this topic, and today’s will focus on range trading. During a ranging market it is appropriate to use horizontal lines to differentiate between the buy and sell zones, and so the trader is able to take advantage of trading opportunities. This information is particularly useful to beginner traders, as it provides options as to what to look for in trade setups.

Many persons trade ranges exclusively, and it is a strategy that usually offers very good reward relative to the risk being taken. Profit target is the opposite end of the range, while the stop-loss is generally placed above/below the reversal signal at either end of the range. Below is a chart labeled accordingly:

I hope this proves to be useful for you. If there are any other particular topics you would like me to cover, please let me know. Thanks, and successful trading! 🙂

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