Range Trading is a trading strategy that involves buying and selling an asset when its price moves within a specific price range defined by clear support and resistance levels.
Range Trading is a trading strategy used by crypto traders to capitalize on price movements that are stuck in a horizontal or sideways range. Under these conditions, the asset price tends to move between the identified support (lower boundary) and resistance (upper boundary) levels.
Traders using the Range Trading strategy will buy an asset when its price approaches the support level and resell it when its price rises near the resistance level. The aim is to take advantage of limited price movements within the range.
This strategy is suitable for use when the market is in a state of consolidation or unclear trends, where prices tend to move within a limited range over a certain period. To effectively apply Range Trading, traders need to be able to identify strong support and resistance levels, and use good risk management to limit losses if the price breaks out of the forecasted range.