What is Range Trading?
Range trading buys support and sells resistance inside a defined horizontal channel.
Formula
Range Trading Process: 1. Identify clear horizontal support and resistance 2. Wait for price to reach support 3. Buy with stop below support 4. Hold as price moves toward resistance 5. Sell near resistance 6. Wait for price to return to support 7. Repeat until range breaks
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Range Trading shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Range Trading on Nifty (24,300): backtest includes 9:15 liquidity and expiry-day behaviour; edge on index may vanish outside 10:00–14:30 window.
Reliance Industries perspective
Range Trading on Reliance (₹1,300): liquidity is deep but event gaps dominate — strategy rules need explicit earnings blackout weeks.
Bank Nifty futures perspective
Range Trading on Bank Nifty futures (55,000): high beta suits shorter holds; overnight range trading must state NRML risk and gap plan in writing.
How to validate
- Validate Range Trading only after costs — gross win rate can hide negative expectancy.
- Use walk-forward windows (e.g. last 60 / prior 60 trades) for stability.
- Retire or refactor the tag if Range Trading expectancy turns negative with 50+ trades.
- Ensure no overlapping tags duplicate the same trades.
How to track in TradeLyser
- Define Range Trading in Strategy Board with entry/exit/skip criteria.
- Enforce single-tag discipline — no secondary discretionary entries.
- Review expectancy, win rate, and avg R monthly on the tag only.
- Archive tag version when rules change; do not blend old and new trades.
Best practices
- One playbook page per Range Trading strategy with non-negotiable rules.
- Paper trade rule changes for two weeks before live size.
- Track costs explicitly on high-frequency Range Trading variants.
- Compare versioned tags after each rule amendment.
Common pitfalls
- Adding discretionary trades under the Range Trading tag.
- Scaling up after one lucky week of Range Trading results.
- Ignoring brokerage drag on high-frequency variants.
- Retiring a tag without exporting final statistics.
How to use this in TradeLyser
Mark range high/low in screenshot; halt range tag when ADX rises above your cutoff.
Related terms
Average Directional Index quantifies trend strength on 0–100. High ADX suggests strong trend; low ADX suggests chop — regardless of up or down.
Mean reversion assumes prices return toward an average after stretched moves. Works in ranges; dangerous in strong trends.
Resistance is a price area where supply has repeatedly slowed rallies. It is a zone, not a single tick — breaks need confirmation.
Support is a price area where demand previously stepped in, slowing or reversing declines. It is a zone — not a single tick — and can fail.
FAQ
Range on 5m vs 1h?
Higher TF ranges often cleaner — log timeframe.
Partial range fills?
Define exit at mid or opposite side — stay consistent.
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