Range Trading

Range Trading

Profit from price oscillating between clear support and resistance in non-trending markets.

Identification

Range Characteristics

• Price bouncing between two levels with 2+ touches each side
• No clear HH/HL or LH/LL structure
• Volume decreasing during range
• Width large enough that the planned payoff exceeds round-trip costs and slippage

Range Quality

Workflow

1. Confirm Ranging Regime

get_indicators(indicator_code="dmi", symbol=<symbol>, exchange=<exchange>, interval=<interval>)

Use ADX level/slope as one contextual feature, calibrated to the instrument and timeframe. It does not by itself confirm a range or authorize another strategy.

2. Identify Range Boundaries

get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<date>)

Find flat support/resistance with 2+ touches each side.

3. Mark Range Levels

draw_chart_analysis(action="create", drawing={
    "type": "support",
    "points": [
        {"time": <first_touch>, "price": <support_level>},
        {"time": <current>, "price": <support_level>}
    ],
    "options": {"text": "Range Support"}
})
draw_chart_analysis(action="create", drawing={
    "type": "resistance",
    "points": [
        {"time": <first_touch>, "price": <resistance_level>},
        {"time": <current>, "price": <resistance_level>}
    ],
    "options": {"text": "Range Resistance"}
})

4. Trade at Boundaries

• Buy at support: Wait for rejection candle (hammer, engulfing), stop below support, target resistance
• Sell at resistance: Wait for rejection candle (shooting star, engulfing), stop above resistance, target support
• Define the boundary band as an ATR- or range-normalized interval fixed before testing
• Set the target from tested exit logic and require positive payoff after costs; the opposite boundary is a scenario, not a promised destination

5. Report to Orchestrator

Range boundaries, width, number of touches, entry recommendation, stop level, target level. Flag if breakout appears imminent.

Evidence and Validation

• Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
• Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
• Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
• Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
• Research basis: The technical-analysis evidence review supports market-specific testing and warns that rule selection and costs can erase apparent profits.

Key Rules

• Trade only inside the predeclared boundary band; report no trade in the middle.
• Define the rejection trigger numerically and use closed bars.
• Invalidate on the tested close-plus-buffer rule beyond the range, not on a wick.
• Treat relative-volume expansion as breakout risk to evaluate, not proof of direction.
• Reject a range whose available width cannot cover costs and the required payoff.

Related Skills

• breakout-trading -- when the range breaks, switch to breakout strategy
• momentum-trading -- ADX rising above 25 signals transition from range to trend