Range Bound Trading

Range bound trading is a strategy where a trader identifies a price range in which an asset is trading and buys at the support level and sells at the resistance level. This strategy is effective in markets that lack a clear trend and move sideways.

Traders use technical indicators like horizontal support and resistance levels, moving averages, and oscillators to define the range. In cryptocurrency, range bound trading is common during consolidation periods between major bull or bear runs.

It requires patience and the ability to identify when the market is breaking out of the range. Risk management is crucial, as a breakout can lead to significant losses if the trader does not exit the position.

It is a disciplined approach that focuses on short-term profits within established boundaries.