Forex Trading Tips When Market Sideways (Part-1)
When you are excited about forex trading, you may often encounter the fact that the market moves sideways , or some traders call it “flat” . There are also those who call it a more “cruel” term, namely “dead market”.How do you trade forex tips when the market is sideways ?
Many traders avoid such market conditions, because they often experience loss in such conditions. Maybe you have experienced it yourself, when you are reluctantly forced to lose profits that have previously been collected because of being swallowed up by losses as long as the market moves sideways. One possible reason is that you still make transactions even though your trading strategy actually only fits when the market is trending .
Even so, in fact not all sideways conditions are “abyss of hell” for forex traders. Actually there really are , some sideways conditions that are sufficient to be “championed”.
Well, for this time I will try to explain some tips that you can try when meeting a market that is moving in sideways conditions .
Pay attention to market conditions: trading or not
Sideways conditions can be feasible for trading IF you can see prices moving bouncing in certain RANGE . In other words, prices move up and down (oscillate) between two horizontal lines that you can draw on the chart. These two horizontal lines are what we usually know with support and resistance lines.
But remember, you must be able to see clearly that there are “waves” that occur between the support and resistance and there is enough distance between each wave. That is the condition that is worth trading.This condition is different from the choppy condition, which I will explain later.
Then what about choppy conditions? Continue reading this article.
Choppy conditions: not worth trading
Choppy conditions are terms used to describe market conditions that consolidate in a narrow range . You cannot see clearly occurring waves.
Conditions like this are not worth trading because the distance between the turning points that occur is not wide enough so it is not possible to apply a good risk-to-reward ratio .
Note that in the picture above, the price action in the box moves very choppy and moves in a very narrow range . Also note that the two MAs that are installed move very tightly. These are the signs of the choppy market that you should stay away from.
Trading when the choppy market is actually closer to gambling .Moreover, psychologically this condition is difficult to deal with and you will be easily trapped thinking that a breakout will occur, even though it isn’t.
Good, until here the discussion about sideways and choppy markets was used. In the next article I will discuss the tricks of forex trading in sideways market conditions .
Keep monitoring this blog.