5. Rangebound Strategies
Introduction
Rangebound strategies are defined as those where you make a profit provided that the stock remains within a finite price range. You’re looking for a stock that is not going to explode with high volatility; rather, it’s going to trade in a tight channel, preferably between clear levels of support and resistance.
So, bearing that in mind, would you look to trade a rangebound strategy shortly before a news event like an earnings report? Definitely not! Get the news out of the way first, and then you have a greater chance of the stock meandering sideways, hopefully.
Rangebound strategies can be challenging to trade, psychologically speaking. The reason is that as the stock touches support, you don’t actually ...
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