Begin with candlestick charts to identify range-bound behavior on GBPUSD: look for repeated rejections at similar highs and lows, clustering of wicks, and price that oscillates within a horizontal band. Once you’ve defined a range, rotate between buying and selling zones — buy near the lower boundary after rejection signals, sell near the upper boundary after supply shows up — until a decisive breakout occurs.

Workflow

1. Analyze past price action for ranges

   Scan multiple recent sessions on your chosen timeframe (5m–1h for day trading). Identify periods where highs and lows align horizontally for several touches. Measure the range width (in pips) and note the duration. Confirm the structure by checking that price fails to sustain moves beyond those levels and that candles show frequent reversals near the edges.

2. Identify key support/resistance levels

   Mark the strongest swing highs and lows where price bounced at least twice. Use candle wicks and body clustering to place boundaries. Draw a midline (range midpoint) and note micro-level levels inside the band that have produced smaller reversals. These are potential partial-take targets or intra-range entries.

3. Monitor volume for rotation signals

   Forex uses tick volume; watch relative surges. A rotation signal is a volume spike accompanying a rejection candle at a boundary (long wick, engulfing bar or pin). Low volume tests into a boundary followed by high-volume rejection indicate institutional rotation — traders switching from buy to sell or vice versa. Use on-balance volume or a simple volume histogram to confirm.

4. Enter trades at boundaries

   Prefer limit entries at the boundary after a clear rejection candle or a small consolidation just inside the range. For a long: wait for a bullish rejection (hammer, bullish engulfing) at support with volume confirmation. For a short: wait for a bearish rejection at resistance. Position size based on distance to stop-loss and your risk per trade.

5. Exit at predefined targets

   Set explicit targets before entry: common choices are the range midpoint (first target) and the opposite boundary (final target). Consider taking partial profits at the midpoint and moving stop to breakeven. If a breakout appears instead of a clean range rotation, exit quickly or use a predefined breakout strategy to avoid being run over.

Common mistakes

1. Ignoring breakout signals

   Ranges end. If a candle closes beyond the boundary with follow-through and credible volume, treat it as a potential breakout and avoid re-entering the broken side. Chasing range trades after a confirmed breakout is a frequent cause of losses.

2. Misidentifying range extremes

   Placing your boundaries too tightly or including transient noise as a valid touch leads to false entries. Use several touches and visible candle rejection to validate a boundary; redraw if price consistently breaches your line.

3. Risking too much capital in one trade

   Because ranges can shift or break suddenly, over-sizing a position relative to account equity or not using stops amplifies losses. Define risk per trade (commonly 0.5–2% of equity) and size accordingly.

Checklist

1. Identify clear ranges with multiple touches and visible candle rejections.
2. Check volume indicators for confirmation of rotations and rejections.
3. Set stop-loss orders beyond the boundary, sized to acceptable risk.
4. Take partial profits (e.g., at midpoint) and trail stops for the remainder.
5. Review the trading plan after each session: record what worked, failures, and adjustments.

Practical notes: use shorter timeframes for entries and a higher timeframe (e.g., 1h) to validate the overall range bias. GBPUSD often shows session-dependent behavior — London open can expand or confirm ranges — so align trades with session context. Keep trade rules strict: enter at evidence of rejection, manage risk with stops and partial exits, and stop trading the range once a decisive breakout is validated.