GoldViewFX - RANGE BOXING = RANGE VIEW - STRATEGYHey All,
We had some great feedback from our back to BENCHMARK strategy (see related post below) and wanted to share another simple strategy that I have been developing and using for many years that I call, Range Boxing. A term I thought was the perfect cliche of two words for this strategy.
RANGE BOXING creates what we call a RANGE VIEW; A clear view for price action within pre-determined zones. This then allows us to trade a ranging market and get out before a RANGE BREAKER or gear up to ride the RANGEBREAKER by identifying the RANGE SHIFT. I will define each term below and then walk you through the strategy.
RANGE SHIFT
This is the early signs of a range breaker or a merger of a range and allows us to start identifying when the price is about to break out of a range or MERGE (more likely).
RANGE BREAKER
The break out of the range into another range confirmed with EMA5 break and candle body close above or below the RANGE BOX
RANGE BOX
Boxes created around a side by side price range, defining the top and bottom of the box with EMA5 Goldturns (See all my previous posts on Goldturns) Its the way we draw SUPPORT and RESISTANCE. They create levels with less noise and more suited to trade Gold. Please see example below of a RANGE BOX, created using GOLDTURNS.
RANGE VIEW
This is created by using historical range boxes in the same range and bringing over the boxes to the current price range. This now gives you the view of the projected range.
HOW TO USE THE STRATEGY
Strategy can be used on higher time frames for longer term direction, however I find it more effective to trade with on the 1 HOUR and or 4 HOUR chart.
I zoom out of the chart and look for the last time the price was in this range and identify the 3 ranges. One range above (RANGE1), the middle range (RANGE 2) and the bottom range (RANGE 3).
I then created boxes around those ranges 1,2 and 3 using the highs and lows of the Goldturn levels. (See example above).
Once this is done, I now bring those boxes and stretch the boxes across to the current price range. This now gives us the RANGE VIEW. I always put a half line across the range of a RANGE VIEW. It allows me to break down the zone to identify the RANGE SHIFT.
I can now trade the current range using these levels, bouncing up and down the range. Identifying each level break and rejection using Goldturns and EMA5 breaks. If a box is broken with EMA5 and a candle body close, its a range breaker and it opens target to the entrance of the next RANGE BOX. To enter the RANGE BOX we again look for EMA5 to break inside with a candle body close, which then confirms movement to the half line and then same again for the target to the top of the RANGE BOX. A rejection by resistance, will then have the price come back down to find support, until we see another breakout.
We can start to identify early breakouts by identifying a RANGE SHIFT and a fake BREAKOUT by Goldturn rejection. Please see the example of the chart, RANGE 3 into RANGE 2. When the half line is broken up from range 3, price started to find support on the half line from resistance to support. This allowed us to identify the structure for a RANGE SHIFT. RANGE SHIFT's are easier to catch then a RANGE BREAKER, as a RANGE SHIFT is a merger approach into a new range.
I can now also apply the Back to BENCHMARK strategy, as an overlay on each range to support a BREAKOUT or RANGE SHIFT.
I hope you all find this setup useful and it adds as an additional tool to support your trading analysis.
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GoldViewFX
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