| Updated: September 15, 2025Forex trading strategy – positioning based on the prior day’s range
You will learn about the following concepts
- Indicators used with this strategy
- Signals to look for
- Entry point
- Stop-loss
- Profit target
This strategy is based on the past 24-hour trading period of a given currency pair. We examine the 1-hour chart of EUR/JPY. The period reviewed is 00:00 GMT+3 on 23 June to 00:00 GMT+3 on 24 June. We need three price levels – the high, the low and the close during this period. For EUR/JPY we have: H 138.80, L 138.20, C 138.66. The overall daily move (high-low) was 60 pips. We place one buy order and one sell order at a distance equal to 25% of the total move away from the closing price. Therefore, 25% of 60 pips gives us 15 pips.
Taking into account the above-mentioned distance, we place a buy order at 138.81 (closing price +15 pips) and a sell order at 138.51 (closing price -15 pips).
We set the profit target at a distance of 15 pips as well (25% of the prior day’s move). This way, if EUR/JPY makes a move equal to, say, 40% of the prior day’s move, we can still make a profit. For our long position, the profit target will be 138.96, while for our short position – 138.36.
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- Regulation: NFA
- Leverage: Day Margin
- Min Deposit: $100
We place the protective stops as follows: the stop on our long entry is set 10 pips above our short entry, at 138.61; the stop on our short entry is set 10 pips below our long entry, at 138.71.
These two orders need to be set before the trading session you prefer to trade begins. In our case, the sell order was triggered first during the trading day, so we simply cancelled the buy order.
