Strategies
Range Trading: Buying Support and Selling Resistance
Range trading profits from oscillating price between defined support and resistance zones in sideways markets.
Key rules
- Identify range by at least two distinct touches of both S and R
- Buy near support with stop just below; short near resistance with stop above
- Target is the opposite boundary, not beyond
- A range breakout invalidates the strategy — do not fade it
- Volume contraction within a range often precedes the breakout
When price oscillates between clearly defined highs and lows, a range-trading strategy buys near support and sells (or shorts) near resistance. Range trades have defined maximum profit (the opposite boundary) and clear invalidation (a close beyond the boundary).
Always maintain awareness that any range can break out at any time — the breakout direction is often the larger opportunity.