Range Trading
a.k.a. Range-bound trading
Buying near the bottom of a sideways range and selling near the top.
In plain English
Buying near the bottom of a sideways range and selling near the top.
Range trading treats a sideways market like a ping-pong table. When price bounces between a clear floor and ceiling, range traders buy near the floor and sell near the ceiling, with stops just outside the range in case it breaks.
It works beautifully until it does not. Every range eventually breaks, and the trader who keeps fading the edge can get run over by the breakout. Oscillators like the RSI are popular range-trading tools.
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