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How many round trips can a 15 pip range pay for

Range scalping looks easy on a quiet afternoon. Price bounces between two levels 15 pips apart, and you buy near the bottom and sell near the top. Let me put numbers on it before anyone gets excited.

You won't get the exact low or high, so assume you enter 2 pips inside each edge and take profit 2 pips short of the other edge. That leaves 11 pips of travel. Take off about 1 pip of costs and the clean win is 10 pips.

Your stop has to sit outside the range, because a stop inside it will be hit by ordinary wicks. Put it 3 pips beyond the edge, so the stop is 5 pips from entry plus 1 pip of cost, a 6 pip loss.

Now the frequency problem. A range might give you three or four good swings between the edges in an afternoon, and the last one is usually the one that breaks. If you take four trades and three win, you make 30 pips and lose 6, so 24 pips. If the second swing breaks the range instead, you're at one win and one loss, 4 pips, and done for the day.

So the range pays for a few trades at most. Trying to scalp smaller swings inside the middle of it, say 4 pips at a time, runs into the same cost of 1 pip against a much smaller move, and the break-even win rate climbs fast.

I mostly take the first two touches and leave the rest alone.

The width of the range relative to the spread is the number I watch. A 15 pip EURUSD range with a 0.2 pip spread is fine. A 15 pip range on GBPNZD with a 3 pip spread during the late New York session is a different story, because entering and exiting already costs 20% of the full width. I've got a rough rule that the range should be at least ten times the all-in cost before I treat it as tradeable, and on quiet crosses that cuts out a lot of afternoons. A cut like that usually removes the trades you'd regret most.

Time of day decides how long a range lasts. A range that forms between 12:00 and 13:00 London on a day with US data at 13:30 has a known expiry date. Trading the edges at 13:20 makes no sense because the release will probably blow through one side regardless of how well the edge held earlier. I'd stop taking range trades 15 minutes before any red event and only look again once the first reaction has settled. The 15 minutes after the release aren't the time for range trades either. A new range may form later, but it needs its own edges.

Something I'd also track is which edge breaks. If the day's trend before the range was down, the bottom tends to give way more often than the top, at least in my notes. That doesn't mean skipping long trades from the bottom, but it can mean smaller size there, or taking profit at the midpoint instead of the top. Treating both edges as equal when the bigger picture leans one way gives away some of the small edge a range offers. A simple version is to log which side broke on the last 20 ranges you traded and compare with the prior trend direction.

The numbers are a good reality check. With 10 pips clean on a win and a stop outside the range, maybe 6 to 8 pips past the entry once you add the buffer, the break-even win rate is already around 40 to 45 percent before any breakout loss is larger than planned.

The bigger issue in our experience is the count. A 15 pip range in a quiet afternoon might give two or three clean round trips before it breaks, and the break often happens through the side where you're positioned. So we only trade ranges like this when the next scheduled data is hours away, and stop after the second trade.

One mistake I see a lot is moving the range edges as price wicks through them. The high was 1.0845, a wick prints 1.0848, and suddenly the range is drawn at 1.0848. After a couple of those, the range is wider and the original levels are meaningless. I keep the original box and treat a close outside it on M5 as the end of the range. A wick that comes straight back is fine, but I don't redraw for it. The same goes for stops. Moving the stop out with a redrawn edge widens the loss without anyone deciding it should.