Range Trading
Guide by Shaharyar
A range refers to the consolidation phase where price moves between a defined
high and low, forming liquidity on both ends. Smart money uses these ranges to manipulate liquidity
before a significant move.
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Many traders engage in range trading, but few truly understand the fundamentals and different types of
ranges.
There are three primary types of ranges:
1. Typical Range – This is the most basic form of a range, where price moves between a
defined high and low, forming liquidity on both sides. It represents a phase of market consolidation before
a potential breakout. Trade Example
2. Candle Range Theory (CRT) – This occurs when price action develops within the
range of a higher time frame candle. Essentially, the high and low of a significant candle act as range
boundaries, and price movement within it follows the characteristics of a range. Trade Example
3. Time-Based Range – This type of range is defined by a specific time window, such as
the CBDR (Central Bank Dealing Range), the Asian session range, or the Monday range. The high and
low of the chosen time period are marked, and price action is analyzed within that structure.Trade
Example
How to Trade Ranges
A range forms when the price moves between a high and a low without a clear trend, creating a sideways
market. Many traders make the mistake of trading inside the range, where price movement is
unpredictable and lacks clear direction.
Key Rules for Trading Ranges:
➔ Wait for liquidity sweeps – Price often moves beyond the range high or low to trigger stop losses
before reversing.
➔ Use confirmation signals – A CISD or strong rejection can indicate a valid trade setup.
➔ Align with higher time frames – If a higher time frame level aligns with the range, the setup
becomes stronger.
Example:
Incorrect approach: Taking random trades inside the range without confirmation.
Correct approach: Waiting for a liquidity grab at the range high or low, then entering after confirmation.
Turtle Soup Strategy (Fake Breakout Trading)
The Turtle Soup strategy focuses on identifying fake breakouts or purge where price moves beyond a key
level to trigger stop losses before reversing. This allows traders to enter in the opposite direction after the
liquidity grab.
To improve accuracy, focus on:
• A liquidity sweep – Price must take out a key high or low first.
• Change in State of delivery (CISD) – Confirms that price is reversing direction.
• HTF Key Level and kill zone – If the setup aligns with a HTF Key level or a key
trading session (e.g., London open), it is more reliable.
London Killzone Trading Model
This trading model is designed to capitalize on liquidity grabs and directional moves during the London
Open Killzone (3:00-4:00 NY Time). We use H4 as the High Time Frame (HTF) for bias and M5 for
Lower Time Frame (LTF) execution.
Step 1: HTF Bias & Key Levels
• Identify HTF bias using structure, liquidity, and premium/discount zones.
• Mark out DOL and PD Arrays such as IRL, ERL, OB or Breaker.
Step 2: Identifying the Range for Liquidity Manipulation
• Use a CRT Range or Time-Based Range for reference:
• CRT Range: 17:00 or 21:00 NY H4 candle as a Control Range.
• CBDR : 16:00 - 20:00 NY Time.
• Asian Range: 20:00 - 00:00 NY Time.
• The goal is to let price take liquidity from one side during the London Killzone
(3:00-4:00 NY Time) and then look for an entry.
Step 3: Entry Execution
• Wait for liquidity purge or manipulation during the London Open (3:00-4:00 NY Time).
• Look for a CISD on M5 for confirmation.
• Enter the trade after CISD, aligning with HTF bias and liquidity sweep.
Step 4: Intraday Profile for Extra Confluence
• Expect a normal protraction profile:
• Price forms a range in the Asia session.
• London Killzone manipulates one side of the range.
• Price then continues on the other side into the rest of the London and NY session.
• Sell above True Day Opening & Buy below True Day Opening
Credentials of the Model
• CRT Range, CBDR, or Asia Range (NY Time)
• Manipulation or Purge between 3:00 - 4:30 NY Time at a key level
• M5 CISD and SMT Divergence
• Target: 2RR or Midpoint (0.5%) of the range or other side of the range.
Confirmations Checklist
• Time-Based Range (CRT or CBDR or Asia Range)
• Timed Purge or Turtle Soup
• HTF PD Arrays, DOL, or Bias Confirmation
• SMT Divergence
