Forex range (Range market).

Any market has a certain range of price movements; this concept is not spared by the Forex currency market.

Forex range is a corridor in which the price of a currency pair moved over a certain time period (day, week or month). Usually, the minimum and maximum prices for a specific time are taken as the basis for constructing a corridor.

Market range is another meaning of a similar term, primarily used in a trader's trading terminal to set a deviation for market execution of orders. This means the trader agrees to execute an order with a certain deviation from the current price. However, the concept of a price range is more often used in the first sense.

In Forex trading, range boundaries are quite important, as they essentially represent the difference between the minimum and maximum prices on the working time frame. They can serve as a guide for opening new trades and as a limit for placing take-profit and stop-loss orders.

Determining this value is quite simple: simply open the currency pair chart and find the minimum and maximum prices.

For example, on February 5, the minimum price for the EUR/USD pair was 1.3458, and the maximum was 1.3597, or 139 pips. Moreover, it is absolutely unimportant how the price moved during the day; the main thing is that a distance of 139 points was formed between its minimum and maximum; this will be the width of the daily range for the EUR/USD currency pair.

Using this value, we can assume that if the price is within this range at the close, it is highly likely to approach one of the previous day's boundaries the following day. This assumption is used both for entering the market and for placing a stop-loss order.

For example, the current EUR/USD exchange rate is 1.3500 and the market is in an uptrend, meaning the price is highly likely to reach yesterday's high of 1.3597. We open a sell trade, and the take profit can be set around 1.3590.

As for placing a stop-loss order , there are two options. In the first case, it is placed just below 1.3458. In the second case, the Forex range on a lower time frame is used as a basis, which is suitable if you intend to open a short-term trade.

Furthermore, by comparing the price ranges of different currency pairs, you can choose the most profitable trading instrument. For example, while the EUR/USD price movement corridor width usually does not exceed 80 points, for GBR/JPY this indicator is often more than 150 points, making it clear which currency pair offers greater potential for profit.