Range trading is the strategy for a market going nowhere: price is bounded between clear support and resistance, and you fade the edges — buy near support, sell near resistance, betting on the bounce back toward the middle.

The setup

Identify a range: a level price keeps bouncing off (support) and a level it keeps rejecting from (resistance). The trade is to buy near support with a stop just below it, targeting resistance — and the mirror at the top. VWAP often marks the range's center of gravity (VWAP reversion). It's the opposite bet from trend following (intraday trend following).

The risk: the breakout

Every range eventually ends, and the end is a breakout that runs — right through the edge you were fading. That's the range trader's nightmare: fading resistance one more time just as it finally breaks. So the stop is non-negotiable, placed just beyond the level, because a clean break-and-hold means the range is dead (breakout vs fakeout).

Range trading works right up until the trade that doesn't. The stop beyond the edge is what keeps that one trade from erasing all the others.

Reading the regime

Ranges thrive in positive-gamma environments, where dealer hedging absorbs moves and pins price (positive vs negative gamma, pinning and max pain). When gamma flips negative, moves start to extend and range trading gets dangerous — the tell to stand down. See momentum vs mean reversion.