Business, Legal & Accounting Glossary
Range-bound trading is a purely technical method of predicting a stock’s short-term highs and lows. Range-bound trading stocks are stocks which are trading in a defined channel. Simply put, a range-bound trading analyst looks for stocks with a clear support and resistance level. The range-bound trading analyst then buys at the support and sells at the resistance. The simplest way for a range-bound trading analyst to create a channel is to connect a number of high chart points as well as a number of low chart points. The resulting channel is the range within which the range-bound trading analyst operates. A range-bound trading strategy requires fairly constant monitoring of the stock due to the fact that when a stock breaks out of a range it may make a dramatic and sudden price move.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Range-Bound Trading are sourced/syndicated and enhanced from:
This glossary post was last updated: 1st April, 2020