A valid range must exhibit at least two touches of support and two touches of resistance, with no significant close beyond either boundary. The range height should be substantial enough to overcome transaction costs (e.g., at least 1.5 times the average true range over 14 periods). Many practitioners use the 20-period Donchian Channel or simply visual swing highs/lows.
Once the range is defined, the trader calculates the "square" of that range. square the range trading system pdf
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AI responses may include mistakes. For financial advice, consult a professional. Learn more A valid range must exhibit at least two
: It aims to provide structure for both short-term and long-term timing cycles, helping traders identify trend exhaustion and reversal zones before they occur. Once the range is defined, the trader calculates
| Signal Type | Condition | Action | | :--- | :--- | :--- | | | Price touches Upper Band + RSI < 70 | Short at market | | False Breakout | Price closes 0.2% above Upper Band, then closes back inside in the next bar | Short at the close of the false breakout bar | | Squaring Candle | A wide-range candle that opens at Mid-line and closes near the opposite band | Enter immediately at the close |
Michael S Jenkins - Square The Range Trading System 2012 - Scribd