Trading glossary
What is a range in trading?
A range is a market moving sideways between a clear high and a clear low, without making higher highs or lower lows.
A ranging market has no trend: rallies stall at roughly the same high and declines stop at roughly the same low. The top of the range acts as resistance and the bottom as support.
Ranges eventually end with a breakout. Until then, approaches that work in trends, such as buying breakouts, tend to struggle.
How traders use it
- Identify the range's high and low and treat the middle as no man's land.
- Watch for false breakouts at the edges, which are common in ranges.
- Decide what a real break would look like before it happens.
Example
USDJPY trades between 148.00 and 150.00 for a month, touching each side three times. That is a range. Buying at 150.00 or selling at 148.00, the edges, has the worst risk unless price is clearly breaking out.
Frequently asked questions
How do you know a range has ended?
A close beyond the range's high or low, ideally followed by a retest that holds.
Are ranges common?
Very. Markets spend a lot of time moving sideways between trends.
Related terms
Related patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.