How to Trade a Range with Swing Highs, Lows, and Deviations
UB’s Guide to Trading Ranges
Identifying a Trading Range
Start on the Daily Chart to spot major support and resistance levels.
Switch to the 4-Hour Chart to pinpoint key reaction points, such as previous highs and lows with strong price movements.
Marking the Range
Range High → The level where price faces strong rejection.
Range Low → The level where price experiences a sharp bounce.
Trading Highs & Lows Within the Range
Ping Pong Trading: Buy near the range low and sell near the range high.
Short Trade Setup (Swing High)
Wait for price to break above the range high.
If it fails to hold and falls back inside, enter a short position.
Stop-loss above the wick of the false breakout.
Take profit at the mid-range and range low.
Long Trade Setup (Swing Low)
Wait for price to dip below the range low.
If it bounces and reclaims the level, enter a long position.
Stop-loss below the wick of the previous sweep.
Take profit at the mid-range and range high.
Using Deviations to Confirm Trades
Deviation Setup: Occurs when price briefly breaks out of the range but fails to hold.
Example
If price breaks above the range high but closes back inside, it signals a short opportunity.
If price drops below the range low but closes back inside, it signals a long opportunity.
Why It Works: Deviations trap breakout traders, creating high-probability reversal setups.
Risk Management & Profit-Taking
Stop-Loss Strategy
Place stops just beyond liquidity sweeps.
Exit early if price flips key levels into support or resistance.
Take-Profit Strategy
TP1: Mid-range (equilibrium).
TP2: Opposite end of the range.
TP3: If price breaks the range, target the next liquidity zone.
Conclusion
Identify a strong range before trading.
Use liquidity sweeps as entry signals.
Wait for deviations to confirm trades.
Manage risk with stop-loss and take-profit levels.
This approach maximizes range trades while avoiding false breakouts.