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BetonMarkets Strategy

BOM Strategy Part 1 • BOM Strategy Part 2 • BOM Strategy Part 3

Range Trading

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BetonMarkets Strategy Part 3: Reversal Trading

Reversal trading is also known as range trading or pivot trading. It's really cool when it's working. And it works a lot. The chart you see above is a rather perfect example of the concept. In fact it is a bit too perfect, as usually the range isn't so well defined. But this gives you a good idea of the setup at least. In reality you will need to understand that the range is usually just a bit sloppier. You will get to recognize them better with experience.

The edges of the range represent support and resistance. When price reaches the extreme edge and stalls, that is typically your entry signal. As a sharp BetonMarkets trader you would either make a no touch bet just a bit outside the extreme of the range, or a one touch bet in the other direction. In my experience the one touch bet in the opposite direction is usually more reliable, as sometimes price will hit your no-touch barrier just before reversing back in the range and heading the opposite way as expected.

There is another way to play these as well. When you see price in the middle of the range you can try to capture price in the range with a barrier range bet or a an expiry range bet.

Reversal trades have the added advantage of price value being in your favor, as you are betting the opposite way of recent price direction. This tends to help when pricing out your wagers on the BOM system. My favorite reversal strategy play is a one touch bet just before the opposite edge of the range.

However you need to be aware that the longer and safer the range looks the more risky it actually is to play. After a well-defined range is formed everybody notices. Price is more likely to break out at each range extreme. All the breakout players know this and many of them will start gambling on positions, anticipating a possible breakout early. When this happens it's where all the action is to be found, and volume picks up - making the situation more volatile.

In general you want to see medium volume around the edges of the range. Not toooo much, as that increases the chance of a breakout. And not too little either, because on light volume the market makers (and other big players) can manipulate the price to take out your stops before letting it slide back into the prior trading range.

On the chart above, the best trade is second Buy on the bottom. The range is well defined at that point, but not too old. Most ranges offer one really good trade setup and then maybe one other not too bad of a play. Anything more is pushing your luck.

False breakouts are the enemy of both reversal traders and breakout traders. Amateurs get chopped up when this happens. An alert reversal trader can learn to spot false breakouts and play them like a range reversal, with very little risk and a lot of reward. But it takes some experience in order to spot them reliably.

For more details on entry and exit signals see the BetonMarkets systems articles on this website.

Disclaimer: The information on this website is for entertainment purposes only and is not to be taken as financial advice. Always consult your professional financial advisor before undertaking any investment or trading plan. In some jurisdictions financial betting at BetonMarkets.com might be considered online gambling and therefore be deemed illegal, so check with your local laws first. There is risk associated with trading or financial betting and you can lose money. Proceed at your own risk.