Range Trading Strategy: Accurate Calculation & Setup

Main Ideas / Lessons Conveyed

• The speaker presents a range-trading approach focused on:
  • accurate candle selection, then
  • using indicator/box levels to track targets and rejections.
• Trade correctness is repeatedly attributed to selecting the correct candle:
  • Green = bullish / “buying” impulse cases
  • Red = bearish / “selling” impulse cases
• After selecting a setup candle, the method marks fractional levels of that candle’s full range (25%, 50%, 75%, 100%) and watches whether price action:
  • closes above certain “Target” levels (suggesting continuation toward higher targets), or
  • rejects levels (suggesting reversal / mean-reversion / range behavior).
• The approach is demonstrated primarily on 4-hour (4H) and 1-day (1D) timeframes, with plans to backtest smaller timeframes.
• A breakout/projection rule is added: if price breaks a key level, compute an additional projected level using a 2x measure (described as “taking 100% from there till the top,” resulting in a 2x level).

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Methodology / Step-by-Step Instructions

A) Candle Selection (Core Rule)

If the market is in a buying phase (“going into buying”):

• Select a bottom green candle
• It should be an impulsive/bullish reaction candle following a prior sell-off
  • emphasis is on choosing a “good green candle,” not just any green candle

If the market is in a selling phase:

• Select the top red candle (described as “sailing/selling,” i.e., the bearish reaction/impulse candle)

Rationale / interpretation of a correct selection:

• The selected candle should mark a transition from one swing direction to the opposite via an impulsive reaction (bullish or bearish),
• and that impulse should later enable the expected target/rejection behavior.

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B) Draw Levels Using the Selected Candle’s Full Range

After marking the selected candle:

• Mark 100% of the candle’s full range
• Then subdivide the range into:
  • 50%
  • 25%
  • 75%
• The indicator is described as being placed directly onto the setup candle to generate these levels automatically.

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C) Target Behavior to Watch After Placing the Levels

After the levels are placed:

• If the candle body closes above Target One:
  • price is expected to move toward the second target
• If instead price shows rejection at a level (examples include rejection around 75%, “pinpoint” rejection, and failing to close bodies beyond a level):
  • it supports the scenario where price moves into/within a range rather than trending away

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D) Track Subsequent Reactions (Re-anchoring the Box)

Once the market has moved and “the range came out”:

• Create a box representing two ranges and track only within the projected relevant area
  • the speaker emphasizes limiting tracking to the relevant extent/range

Box anchoring direction:

• When the market is in selling:
  • place the box using the top of the red candle from where selling originated
  • described as aligning to about 75% of the move
• When the market is in buying:
  • place the box using the green candle
  • shown as leading to observed rejections and completion of range percentages

What correct candle selection produces (as demonstrated):

• rejection at expected fractional levels
• partial confirmations (e.g., “50% rejection / 50% completion”)
• eventual completion of the full 100% range when placed correctly

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E) Timeframe Application and Backtesting Rules

The system is claimed to work well on:

• 4H
• 1D

Backtesting on smaller timeframes is also mentioned as ongoing.

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F) Breakout / Projection Rule (“2x Level”)

If the market breaks a key level after the setup/box is drawn:

• draw 100% from the marked starting point to the top
• this is described as producing the 2x level (a projection beyond the original 100% range)

The speaker also suggests:

• copying/marking those projected horizontal levels (drawing horizontal lines at the discovered levels and extending them)

In short: correct initial setup → correct levels → correct continuation/rejection behavior → correct tracking, with a special projection step if key levels break.

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Outcome Expectations (Implied by Demonstrations)

• Correct candle selection → more accurate target progression:
  • bodies closing above targets → continuation to higher targets
  • failure to close beyond levels → rejection and range behavior
• Incorrect candle selection → the analysis becomes unreliable:
  • “all your analysis will go wrong”

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Sources / Speakers Mentioned

• Primary speaker: A trader/educator referred to as “I” (name not provided)
• Platforms/accounts mentioned:
  • Twitter (past market expectation sharing)
  • Telegram (indicator updates and backtesting progress)

No other distinct named speakers are identified in the subtitles.