What Is A Range Trading Strategy?

Learn more about what is a range trading strategy, support and resistance levels, and how to identify entry and exit points to gain profits in trading.

• Question 01

  In range trading, where do traders aim to buy and sell?

  Your Answer

  • A. Buy at market highs, sell at market lows

  • B. Buy at resistance levels, sell at support levels

  • C. Buy at support levels, sell at resistance levels

  • D. Buy when the market is trending upward, sell when it's trending downward

• Question 01

  Which strategy involves the use of parallel support and resistance lines to identify trading opportunities?

  Your Answer

  • A. Fibonacci retracement

  • B. Horizontal Channels

  • C. Elliot Wave Theory

  • D. Ichimoku Cloud

• Question 01

  When employing the range breakout strategy, what event are traders eagerly awaiting?

  Your Answer

  • A. A decrease in market volatility

  • B. A breach of support or resistance levels

  • C. A convergence of moving averages

  • D. A market reversal at key Fibonacci levels

• Question 01

  Which strategy involves the calculation of potential support and resistance levels using the previous day's price action?

  Your Answer

  • A. Pivot Points

  • B. Head and Shoulders pattern

  • C. Cup and Handle pattern

  • D. Double Top pattern

• Question 01

  How does the range bar strategy differ from traditional time-based analysis?

  Your Answer

  • A. It focuses solely on long-term trends

  • B. It uses bars based on price movement instead of fixed time intervals

  • C. It disregards support and resistance levels

  • D. It relies heavily on economic indicators

• Question 01

  In which type of market does range trading work best?

  Your Answer

  • A. Trending markets

  • B. Volatile markets

  • C. Sideways or consolidating markets

  • D. Bearish markets

• Question 01

  What tool is commonly used to identify support and resistance levels in the pivot point strategy?

  Your Answer

  • A. Bollinger Bands

  • B. Stochastic Oscillator

  • C. Fibonacci retracement

  • D. Previous day's price action

• Question 01

  What is the main drawback of range trading?

  Your Answer

  • A. Inability to profit in any market condition

  • B. Reliance on unpredictable market movements

  • C. Limited profitability in trending markets

  • D. Lack of structured approach with defined boundaries

• Question 01

  How does the pivot point strategy differ from the range breakout strategy?

  Your Answer

  • A. Pivot points focus on long-term trends, while breakout strategies focus on short-term fluctuations

  • B. Pivot points use fixed support and resistance levels, while breakout strategies identify new trend directions

  • C. Pivot points rely on volume analysis, while breakout strategies analyze price momentum

  • D. Pivot points determine intraday ranges, while breakout strategies aim to capitalize on price breakouts