Core Ideas of a Master in Range-Bound Trading

- Don’t chase trends; buy high and sell low within the range
- Don’t hold onto losing positions; cut losses quickly
- Use small positions, enter and exit quickly; take profits and run
- Focus on the range; do not predict breakouts

1. First, determine: Is it a range? (Experts can identify at a glance)

Any two of the following indicate a range:

1. Daily/4-hour chart shows no consecutive new highs or lows
2. Candlesticks repeatedly bounce between two parallel lines
3. Moving averages are tangled (MA20 and MA50 are glued together)
4. Bollinger Bands are narrowing, with price bouncing between the upper and lower bands

As long as it’s a range, trend-following strategies are invalid. Highs and lows within the range are the way to go.

2. Expert Standard Range-Bound Strategy (Applicable to Binance Contracts)

Strategy Name: Bollinger Bands Range Trading Method

Timeframe

- Main timeframe: 1 hour
- Filtering timeframe: 4 hours (to confirm range)

Indicators

- Bollinger Bands (20, 2)
- RSI(14)

Rules

1. Trade only within the range; stop trading if price breaks out
2. Near the lower band + RSI oversold → go long
3. Near the upper band + RSI overbought → go short
4. Do not trade or hold positions in the middle zone

Entry

- Long: Price touches the lower Bollinger Band, RSI < 30
- Short: Price touches the upper Bollinger Band, RSI > 70

Stop Loss

- Outside the range: 1%~1.5%
- In range: Keep stop loss small to avoid being swept back and forth

Take Profit

- First target: Middle band
- Second target: Opposite band
Avoid greed; greed in range-bound trading leads to losses.

3. Advanced Master Level: Fake Breakout Filtering (Increase Win Rate by 20%)

The biggest pitfall in range trading is false breakouts.
Experts only recognize one type of breakout:
4-hour candlestick