Range trading is a simple and popular strategy based on the idea that prices often hold within a steady and predictable range for a given period of time. It’s most effective in markets with stable and predictable economies, and currencies that aren’t often subject to surprise news events.
Range traders rely on being able to frequently buy and sell at predictable highs and lows of resistance and support, sometimes repeatedly over one or more trading sessions.
Range traders may use some of the same tools as trend traders to identify opportune trade entry and exit levels, including the relative strength index, the commodity channel index and stochastics.