The Investigator Advantage
Trading Ranges
A trading range is an area where prices for a period of bars remain in a
fairly confined price range. Technical analysts believe that this is a
period where supply and demand for a financial instrument are at
equilibrium. If there is a large price breakout of the trading range, it
shows that suddenly the supply or demand for the financial instrument has
increased. This could signal the beginning of a large price movement.
Investors have been eyeing or hand drawing trading ranges on charts for years. This has lead to varying opinions among investors about the definition of trading ranges and about what constitutes a valid breakout from a trading range. This subjectivity has also made it virtually impossible to historically test trading ranges. Investigator uses a precise mathematical definition for trading ranges, as well as precise mathematical definitions for breakouts from trading ranges.
Investors have been eyeing or hand drawing trading ranges on charts for years. This has lead to varying opinions among investors about the definition of trading ranges and about what constitutes a valid breakout from a trading range. This subjectivity has also made it virtually impossible to historically test trading ranges. Investigator uses a precise mathematical definition for trading ranges, as well as precise mathematical definitions for breakouts from trading ranges.
