The summer months in the northern hemisphere are usually characterized with slower trading, with many currency pairs sticking to ranges. For range traders, this is the ideal environment, and some traders who don’t prefer ranges, switch into this summer style. While the previous summer was far from a quiet one, trading was still slower most of the time, and will probably be so this time as well. This is the first article of a small series of articles about range trading, starting with how to trade the range itself. Even the best ranging pairs (crosses in many cases, which have additional advantages) never trade in a perfect range – they don’t necessarily touch the bottom or the top. Buying at the very bottom and selling at the top may maximize profits when you trade, but has significant risks: When you are waiting for an entry point, the pair may not touch the bottom or the top before changing direction and moving to the other direction – you may miss a good trading opportunity. When you are already in a trade, the pair may skip the bottom or the top and you may find yourself seeing a nice profit but not realizing it, eventually seeing it eliminated. When the pair already hits the range limits, it may continue moving in the same direction, break out of range and leave you either with a loss or with frustration of a missed opportunity. Most of the time, currency pairs trade deep within the range – closer to the middle than the extremes. So how can you trade it? Enter a trade around 15% from the top/top: instead of waiting for the pair to touch the top or the bottom, something that may not happen or will end in a breakout, buy when the pair descends to the bottom 15% of the range / sell when the pair reaches the top 15% of the range. This is close enough to the extreme but not too far off, limiting the risks detailed beforehand. The Take Profit point would be on the other side of the range, 15% below the top (in case of a long) and 15% above the bottom in case of a short. The reward on this trade is 70% of the range. The Stop Loss point would be out of the range, 15% off the limits. This would be in a total of 30% of the range. All in all, this is a risk-reward ratio of 70:30, or 2.33:1 and is less risky. Do you trade ranges? If so, how do you trade them? What do you think about this idea? Further reading: 5 Most Predictable Currency Pairs – Q3 2012 Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Basics & IndustryForex Basics share Read Next Draghi Continues Giving Advice to Governments Yohay Elam 10 years The summer months in the northern hemisphere are usually characterized with slower trading, with many currency pairs sticking to ranges. For range traders, this is the ideal environment, and some traders who don't prefer ranges, switch into this summer style. While the previous summer was far from a quiet one, trading was still slower most of the time, and will probably be so this time as well. This is the first article of a small series of articles about range trading, starting with how to trade the range itself. Even the best ranging pairs (crosses in many cases, which have… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.