Use to identify overbought and oversold areas
Assume this range sticks until proven otherwise
Can use this method in all time frames and across most assets which are ranging
If $3,600 breaks I'm out of the market as I will wait for a retest back to 200 Week MA at $3,400 for possible longs. Never have naked orders out there. Wait for multiple confirmations before trading.
So, now you've come to accept this is an emotional sport and that you need to manage your emotions let's segway to the following suggestions:
1) Establish the range. There should be multiple horizontal touches on the top and bottom.
2) What indicators work well in a ranging market? Use Bollinger Bands + Commodity Channel Index to identify overbought + oversold conditions
3) Understand markets can range from long to short term periods so have a plan on where to place stops so you can maximize any moves to the upside or downside
4) A market is ranging until it isn't. What do I mean by this? Draw out on your chart possible paths using Fibonacci levels on what a realistic breakout would look like either to the upside or downside. Go back in history to find out how the asset moved out of a range and plot it in the future.
5) Ranging markets will leave dead bodies everywhere. People will over position size, get the timing wrong, will get stopped out for losses and will get wrong footed. Why? People move away from what their indicators are telling them and are feeding into the psychology of the market and trading emotional instead of objectively.
Don't fall into the trap of trading emotionally ever, but especially in a ranging market. During such periods of consolidation is when you hear twitter experts calling for a huge break out or others calling for a doomsday. This period usually is associated with lower volumes and volatility so traders are getting impatient.
So this is when you need to adopt the jedi mindset and trust your indicators. Only buy/sell when things get oversold/overbought and trust the indicators and the top and lower bound of the ranges. Until the asset breaks out of this range this gives you an overall target on when to trade. The bollinger bands tighten things up a bit more and give you more focused areas to buy/sell.
Also DYOR on the bollinger bands + CCI indicator and how you can use these to successfully range trade. There is a lot of helpful articles and videos to allow you to be profitable during these tricky phases.