V.13:4 (149-152): Range Breakout Trading in Treasury Bonds by Alex Saitta

V.13:4 (149-152): Range Breakout Trading in Treasury Bonds by Alex Saitta
Item# \V13\C04\RANGE.PDF
Availability: In Stock

Product Description

Range Breakout Trading in Treasury Bonds by Alex Saitta

Markets are either trending or in a trading range marking time until the next trend. It follows, then, that a potential trading concept is to identify the trading range and wait for the new trend to start. Here's one method for identifying a trading range and the results of trading the breakout.

As technicians, we've all been told numerous times to go with the breakout. But how many of us ever really think about the logic behind range breakouts and why breakouts are usually followed by prolonged trends? Familiarity with this logic is critical when the validity of this concept is being tested and a range breakout trading strategy is being developed.

Think about what's occurring inside a tight and narrow trading range; in it, bulls and bears of equal number and strength slug it out for control of the market. As time passes, intensity builds as more bulls and bears enter the market, placing their bets. Suddenly, there is a drastic change of psychology and the market begins to move in one decisive direction. At that moment, the players on the wrong side of the trend run for the exit. The other traders, realizing they are on the right side of the trend, begin to add to their winning positions. With that, the market begins a prolonged trend.

Given that example, here's the next question a bond technician might ask: Has that logic been confirmed in the bond market? When Treasury bond futures have been in a tight, narrow and lengthy price range and a drastic change of psychology causes the market to begin to move one way, does a prolonged and profitable trend usually follow?

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order