A range is a market moving sideways between a fairly flat range high and range low. Neither buyers nor sellers control it, so price oscillates between the two edges. Ranges make up a large share of market time, so knowing how to trade them matters.
The basic range playbook
The core idea is to sell near the top of the range and buy near the bottom, fading the move back toward the middle. Trades work best when you wait for price to reach an edge and show rejection rather than entering in the middle where there is no clear level.
Entry, stop and the breakout risk
Enter near an edge on a rejection signal and place your stop just outside the range — a close beyond the edge means the range may be breaking. Your first target is usually the opposite edge or the range midpoint. The main danger is that every range eventually breaks, so keep stops tight and never fight a decisive breakout.
- Trade the edges, not the middle of the range.
- Wait for rejection before entering — do not assume the edge will hold.
- Stop goes just outside the range; a close beyond it is a warning.
- When the range breaks with force, switch to breakout thinking.
Fade the edges of a range — but the moment price closes decisively outside it, the range is over.