Range Trading for Futures

Futures prop firms like Topstep and Apex use trailing drawdown, which means early large profits can be dangerous (they ratchet up your floor). Range trading produces small, consistent wins that build your buffer gradually — ideal for managing trailing drawdown.

The strategy: buy at established support, sell at established resistance, with stops just beyond the range boundaries.

1. Identify the overnight range (6 PM – 9:30 AM EST) 2. After the first 15 minutes of RTH (9:30–9:45), identify the developing range 3. Buy at range support (double bottom, demand zone) 4. Sell at range resistance (double top, supply zone) 5. Stop loss: 4–8 ES points beyond the range boundary 6. Take profit: opposite range boundary minus 2 points 7. Max 3 trades per session

This works best on low-ATR days when ES ATR is under 50 points.

For Topstep ($50K account, $2,000 trailing DD): - Risk per trade: $200–$300 (1–1.5 ES points per contract) - Max daily loss: $600 (30% of trailing DD) - This leaves 70% of your trailing DD as buffer

Critical: Do NOT size up after a winning streak. Your trailing drawdown floor rises with profits, so those early wins increase your future risk. Keep position size constant.