Glossary
Range
A market moving sideways between a defined support floor and resistance ceiling.
Range, explained
A range is a period where price oscillates horizontally between a support level (the floor) and a resistance level (the ceiling) without making sustained new highs or lows. Markets spend a large share of their time ranging rather than trending.
Inside a range, the edges are the high-probability zones: traders fade the boundaries — buying near support, selling near resistance — and treat the midpoint as fair value. The premium half is for shorts, the discount half for longs, which keeps entries at the favourable end of the range.
The danger in a range is the middle. Entries taken in the centre have poor reward and get chopped up by the sideways noise, while entries from the edges have a clear level to lean a stop against and the whole width of the range as a target. Patience to wait for the boundary is most of the edge.
Ranges eventually resolve with a breakout, but false breakouts (liquidity sweeps of the range high or low) are common, so confirmation beyond the edge usually beats chasing the first push through. A range high is exactly the kind of obvious level where stops cluster, making it a natural target for a sweep before the real move.
On the desk we identify whether we are in a range before choosing a tactic: in a range we fade the edges and respect the premium/discount split; on a confirmed break we switch to trading the new trend. Applying trend tactics inside a range, or range tactics into a real breakout, is a common way to get whipsawed.
Frequently asked questions
- How do I trade a range?
- Fade the edges: buy near support in the lower (discount) half and sell near resistance in the upper (premium) half, with stops just beyond the boundary and the opposite edge as the target. Avoid trading the middle of the range.
- How do I know when a range is breaking out?
- Wait for confirmation beyond the edge — ideally a strong, displaced close rather than a single wick. Pokes past the high or low are often liquidity sweeps that reverse, so chasing the first push through frequently leads to a false breakout.
Related terms
Trend
The dominant direction of price — a sequence of higher highs and lows, or lower highs and lows.
ReadSupport & Resistance
Price levels where buying or selling has repeatedly stepped in — floors and ceilings on the chart.
ReadPremium & Discount
Whether price is expensive or cheap relative to the midpoint of a range — buy in discount, sell in premium.
ReadLiquidity Sweep
A sharp push past a high or low that triggers resting stops before price reverses — also called a stop hunt.
Read
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