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 (Range market) is another meaning of a similar term, mainly used when working in a trader’s trading terminal, when it is necessary to set a deviation during market execution of orders.

That is, the trader agrees to execute the order if there is some deviation from the current price. But still, the concept of price range is more often used in the first option. When trading, forex range boundaries are quite important, since they actually show the difference between the minimum and maximum prices on the working time frame.

And they can serve as both a guideline for opening new transactions and a boundary indicator when placing take profit and stop loss orders. Determining this indicator is quite simple, just open the chart of the currency pair and find the minimum and maximum prices.

For example, on February 5, the minimum price value for the EUR/USD pair was 1.3458, and the maximum was 1.3597 or 139 points. Moreover, it does not matter at all how the price moved during the day, the main thing is that between its minimum and maximum there was a distance of 139 points, this will be the width of the daily range for the EUR/USD currency pair.

Using this value, we can assume that if at the time of closing the price is within this corridor, then the next day with a high probability it may approach one of the boundaries for the previous day.

This statement is used both for entering the market and for placing a stop loss order. For example, the current exchange rate for EUR/USD is at 1.3500, there is an upward trend in the market, which means that with a high probability the price can reach yesterday’s high of 1.3597. We open a sell transaction, and set the take profit within 1.3590.

As for placing a stop loss order , there are two options; in the first case, it is set just below 1.3458.

And in the second, the Forex range on a lower time frame is taken as a basis, this is if you are going to open a short-term deal. In addition, by comparing the price range of different currency pairs, you can choose the most profitable trading instrument. For example, if for EUR/USD the width of the price movement corridor usually does not exceed 80 points, then for GBR/JPY this indicator is often more than 150 points, it is clear which of the currency pairs has more prospects for making money.