After reviewing the historical price of the commodity is found the investor maps our the "trend lines". This allows the trader to buy the desired commodity at the lower trend line (aka "support" (at the bottom of the channel)) and sells them the upper trend line (aka "resistance" (at the top of the channel)).
Once the pattern is discovered the range-bound trader can make a prediction of the continuation of that pattern; buying on the support; and selling at, or just before, the resistance. The strength, or reliability, of thise strategy depends upon how closely the commodity continues to follow its historical patterns. For example, if the price has moved lower off of the resistance trend line five or four times, it's considered more reliable than if the price only moved off of it two times. So, repetition is key in using this strategy. When sudden growth or decline occurs in the commodity's price, the ranges and trend lines will need to be reestablished in order to continue using the range-bound strategy. In the world of cryptos, this will be a near daily reconfiguration; thereby making range-bound trading to be a short term affair.
Most traders place stop-loss points (automatic sale of the commodity in order to avoid dramatic losses) just above the upper and lower trend lines. So, if you purchase a crypto, or other commodity, at $10k; with a stop loss of $9k; you are limited to a 10% loss of investment.
In short; "range-bound" trading is a simple matter of learning the history of the prices in the commodity, or crypto, in which you want to invest. Once the patterns are isolated, you'll soon see the buy/sell strategy building itself.
Good luck in your investments; Happy HODLing!!!
ZeroState ICO (ZSC)
Posted in Live ICO on Apr 16, 2018ZeroState is the world’s first emotional intelligence platform. It helps advertisers around the world increase the loyalty of their customers by analyzing their emotional involvement. Till 31 August 2018
Marginless ICO (MRS)
Posted in Live ICO on Apr 16, 2018Marginless is a betting exchange and a social betting network, where all users can share their betting insights, create their own markets, place bets against their friends or oppositors without being overcharged or simply tricked. Till 31 May 2018
NuVoo Cloud Mining Review
Posted in Reviews on Apr 15, 2018My regular readers and social media followers are aware of my general skepticism concerning cloud mining. There are simple too many opportunities for a scam. Hence, my own propensity for small scale software pool mining.
Hashflare Cloud Mining review
Posted in Reviews on Apr 15, 2018In the crypto sphere there are no "mints" printing our money. To create cryptos we must "mine".
What is Cryptocurrency Trading & How to Trade Cryptocurrencies?
Posted in Crypto Trading on Apr 15, 2018Before we discuss trading, let's clarify the true nature of exactly what a crypto really is.