Markets trend a surprisingly small fraction of the time. Studies of intraday forex and index behavior regularly put a genuine trending state at somewhere between 20 and 30 percent of trading hours; the rest is rotation between two boundaries, a market deciding it has moved far enough for now and waiting for a reason to do more. EURUSD can spend six of eight London hours doing exactly this, drifting between 1.0810 and 1.0860 while traders hunting for the next big trend get chopped up trying to force one that isn't there.
Ranges are not a defect in the market, they are its resting state, and refusing to trade them, or worse, trading them like a trend, is one of the most common ways an account bleeds slowly instead of trending steadily upward.
Marking a range that actually holds
A range needs at least two touches on each side to earn the label, ideally with some separation in time between the touches so you know the level is being defended rather than randomly grazed. Draw the boundary as a zone, not a hairline: on gold, a range top tested at 2418, 2421 and 2416 is one level with about $5 of noise around it, not three different resistances. Anything narrower than the instrument's normal hourly wiggle, say under 15 pips on EURUSD or under 40 points on the Nasdaq, is probably just noise, not a tradeable box.
The two ways to trade a box
Inside a genuine range there are exactly two honest approaches. The first is fading the edges: selling near the top of the box with a stop just beyond it and a target near the bottom, then doing the reverse near the bottom, on the assumption the range holds one more time. The second is waiting for the break: doing nothing inside the box at all and only acting once price closes clearly beyond one edge with some follow-through. Both are legitimate. What is not legitimate is buying in the middle of the box because it 'feels like it wants to go up,' which is a coin flip wearing a strategy's clothes.
Sizing and stops inside a range
Ranges reward tight risk because the box itself defines the invalidation. Fading the top of a gold range with resistance at 2418 and a stop at 2424 risks $6.00 per ounce. At 1% risk on a $10,000 account, that is $100 divided by $6.00 times $100 per dollar move on a standard lot, which comes out to roughly 0.17 lots, a small, precise position built directly from the box's own edges. That tight, box-defined stop is one of the real advantages range trading has over trading a trend, where stops often have to sit further back just to survive normal breathing room.
When the range is about to end
Ranges die the same way trends do, gradually and then suddenly. Watch for shrinking swings inside the box, price making higher lows into the top or lower highs into the bottom, a coiling pattern that often precedes the eventual break. Watch for a touch that behaves differently than the ones before it: less hesitation, a bigger candle, a close near the extreme rather than a wick and reversal. Neither guarantees the breakout that follows will hold, false breaks out of ranges are common, but both are reasons to stop fading that particular edge and wait to see what the market does next.