Range Trading: Buying Support, Selling Resistance
Markets spend more time ranging than trending. Range trading strategies capture this behavior with defined risk and consistent setups.
Strategies · April 21, 2026 · 5 min read
A ranging market is one where price oscillates between defined support and resistance levels without a clear directional trend. Studies suggest that markets trend only 20–30% of the time — meaning range trading strategies are applicable for the majority of market conditions that trend-following strategies explicitly avoid.
Identifying a Valid Range
A valid trading range requires at least two clear touches of the upper boundary (resistance) and two touches of the lower boundary (support). The range should be wide enough — typically at least 2–3× your target risk — to make risk-reward viable. The most reliable ranges form after strong directional moves that exhaust themselves, with price then consolidating horizontally for an extended period.
Entry and Management
Buy near support with a tight stop below the range low; sell near resistance with a stop above the range high. Target the midpoint of the range for partial profits, then the opposite boundary for the full target. The key risk is a breakout: ranges end, and when they do, they often end with significant momentum. Using a close beyond the boundary (rather than just a wick) as your invalidation criteria reduces false exit signals.
Momentum Trading: A Complete Guide to Riding the Wave