The short answer
Neither, in our test. Fading the range edge, trading the breakout and trading a failed breakout all lost after costs (-0.06R to -0.11R a trade over about 6,200 trades), and all three were no better than random before costs either. Fading the edge traded about once a day per market, so lack of trades was not the problem.
What we tested
- Markets
- XAUUSD (gold), EURUSD, GBPUSD, USDJPY, US500, US100
- Period
- Two years, M15 ranges with M5 triggers
- R1: fade a touch of the range edge back towards the middle.
- R2: trade a close beyond the range in the break's direction.
- R3: trade a failed breakout (a close beyond, then back inside) the other way.
Results
| Rule | Trades | After costs | Random | Before costs | Random before costs |
|---|---|---|---|---|---|
| R1 fade the edge | 4,147 | -0.105R | -0.081R | -0.035R | +0.003R |
| R2 breakout | 1,426 | -0.057R | -0.017R | -0.027R | +0.023R |
| R3 failed breakout | 626 | -0.070R | -0.077R | -0.026R | -0.026R |
What it means
- Costs as a share of an M5 move ranged from 8% (US100) to 24% (EURUSD), so short-timeframe range trading starts far behind.
- A range narrower than 1.5 times the M15 average range said nothing about the next move; we treat those as noise in the live bot.
Limits of this test
- One definition of the range; Asian, London and New York session ranges are covered in the sweep study.
Frequently asked questions
Does range trading work in forex?
Fading or breaking M15 ranges on gold, major FX and US indices lost money after costs in our two-year test and was no better than random before costs.
How every test on these pages works
- Prices: the broker's own bars from an FTMO cTrader account. Fills are simulated minute by minute on one-minute bars; when one minute touches both the stop and the target, the stop is assumed to fill first.
- Costs: the broker's bid/ask spread measured by hour of day, commission per market, and the broker's own overnight swap rates for anything held past the daily rollover.
- Periods: year 1 = 24 Oct 2024 to 23 Oct 2025, year 2 = 24 Oct 2025 to 24 Oct 2026. Daily rules also use Dec 2020 to Oct 2024 ("2021-24"). Rules are written down before testing and are not tuned on the period that judges them.
- Controls: every rule is compared with entries that have no reason behind them (random sides, random days, or the same rule at fake levels), so a result has to beat chance, not just be positive.
- R is the trade's risk (entry to stop). An average of +0.10R means the average trade made a tenth of what it risked; -0.10R means it lost a tenth.
The full results for the rules RezSync Algo trades, by market and risk profile with every trade downloadable, are in the backtest report.
Related research
Research, not financial advice. These are simulated results on historical prices: they involve no real money, are produced with hindsight of the rules, and past results do not predict future ones. Costs and fills are modelled, and your broker's prices and costs will differ. Trading leveraged products carries a high risk of losing money; test on a demo account first.