When price isn't trending, it ranges — oscillating between support and resistance. Range strategies do the opposite of trend-following: you fade the edges, betting price returns to the middle.
The core idea
In a defined range, sell near resistance and buy near support, targeting the opposite side or the middle. Mean reversion assumes that stretched price snaps back toward an average — true in ranges, dangerous in trends.
Confirmation and stops
Don't blindly fade the edge — wait for rejection (a pin bar, a failure to break, momentum divergence) before entering, and place stops just beyond the range boundary. If price breaks and holds beyond the edge, the range is over and your trade is wrong — exit.
The big risk
The fatal mistake is running a range strategy into a breakout. Ranges always end eventually, and fading a genuine breakout can produce a large loss. Define the range, respect the stop beyond it, and accept that the strategy stops working the moment a trend begins.
Key takeaways
- In ranges, fade the edges — sell resistance, buy support, target the middle.
- Wait for rejection before entering; stop just beyond the range boundary.
- Never fade a real breakout — ranges end, and that's when this style fails.