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Most traders lose money in ranges by trading the middle instead of the extremes. The key: premium sits above the range high, discount below the range low. Trading between those points is where most people get destroyed.
Most traders lose money in ranges by trading the middle instead of the extremes. The key: premium sits above the range high, discount below the range low. Trading between those points is where most people get destroyed.
You guys know the deal when it comes to ranges, and if you don't, let me give you a little bit of range trading 101 alpha. When it comes to ranges, you never ever want to be executing in the middle of the range. That is where most people end up losing money. Why? Because when you are dealing, or every single time you manage to identify that, hey, you are currently in a range, I want you to immediately draw your eyes towards the extremes of the range, meaning the range low and above the range high. Because when you're dealing with a normal market condition, A premium discount is simply you draw a fib from the low, you draw a fib to the high, and above the 50% line this is a premium, and below the 50% line this is a discount. That is where the knowledge for most people in terms of premium discount starts and ends. But when it comes to range trading, the premium and the discount is not in the middle. The premium is above the range high and the discount is below the range low. This is something that a lot of people get wrong, and that's why so many people struggle with ranges.
