KOG - Trading the Range - Update:

RANGE BOX:

This post was update on the 8th of January. Its a continuation of previous posts about the range box and how to trade it. Please read the linked posts at the bottom.

When the price is in a ranging market look for date og when the price was last in its range. Example above shows we had the range, a breakout above and then a break back inside the range. Draw a box around the range and then identify the buy area and the sell area. This stops you from trading in the middle of the range and getting chopped up by the market. Always wait for the lower levels to buy and the higher levels to sell. If either level breaks wait for the support or resistance to turn into support or resistance. This give you an indication of potential further movement in the direction of the breakout.

Within the range you will find trends, smaller support and resistance levels and chart patterns. This will further help you to trade within that range of scalp in between levels. Identifying these levels and patterns also give you a view of potential future movement. Again, this helps towards making sure you don’t get caught trading in the middle and getting caught the wrong of the market.

Now we’ve updated the range to present day and it gives us a clearer picture of what the market has been trying to do since October 2021. We can the H&S back in November which as yet hasn’t been tested, with patterns like this they don’t always get a retest but on most occasion the price will come back to test it. This tells us that if we break above the range high again there is potential for the price to test that 1860 at some point.

We can also see that there is a double top recently which caused the price to break back inside the range. Again, on most occasions its likely the price will want to test the pattern or neckline at some point. This gives us an indication of potential movement in the direction of the double top and if we break the double top (we fail a triple top) then there is a chance we could go further up based on support below to test the shoulder of the H&S from Oct. We then add our every day analysis, support and resistance levels and smaller timeframes to further confirm movement and potential challenges on different price regions.

If we now look at the bottom of the chart we have one significant area of interest. That’s the buy area we have been using to take the long trades within the range. We can see its given us a triple bottom in this region where we have seen rejection in price. This area has worked well for Bulls but now we will need to be cautious if the price comes down to challenge this area again. Based on what we mentioned above with patterns its likely the price will want to come down to test this level again at some point. Keeping that in mind we also have to be cautious here as the level has been rejected 3 times forming the triple bottom. The is huge potential now for the next test on this level to break this level aggressively which could take us down towards the lower key support of 1730-20.

Update: 20/01/22

So if you look at what was written above you can see that we are close now to testing the pattern which sits around the 1860 level. The range box shows Gold is using the previous liquidity area at the moment as supply to keep the price above the 1830-35 level. So from here what can we expect? As long as that supply levels hold its likely we are going to attempt to test that 1855-60 region where its possible we will see more liquidity enter the market. At the moment bulls are strong which suggest bears are waiting higher up to get in short. So keep an eye on the levels and the zones.

Hope this helps traders, its more an educational post rather than our usual analysis but please do back test it and see how it works for you. Any questions please do ask, we try our best to answer everyone.