What Is Range Trading?
Range trading is a strategy designed for sideways markets where price oscillates between defined support and resistance levels. The trader buys near the bottom of the range and sells near the top, repeatedly profiting from the oscillation until the range breaks.
How Range Trading Works
- Identify a well-defined range with at least 2-3 touches on both support and resistance
- Buy near support with a stop-loss just below the range low
- Sell/take profit near resistance
- Optionally short at resistance with a stop above the range high
- Exit the strategy when the range breaks with volume
Why It Matters for Traders
Markets spend roughly 70% of the time in ranges and only 30% trending. Range trading strategies exploit this statistical reality. In crypto, range identification combined with funding rate data (fading extreme positioning within the range) and liquidation heatmap analysis (identifying where stops cluster at range boundaries) enhances the edge significantly.