Tuesday, 3 September 2019

Trading Tips on Sideways Conditions

In the forex market, prices have a tendency to move upward (Uptrend) or down (Downtrend). There are also times when prices move sideways or move in a range (ranging) after trending.

But not all Sideways conditions are always the same, some can be traded and some must be avoided. Here are some tips if you want to trade in Sideways:



1. Determine Sideways Conditions That Can Be Traded
Sideways conditions in forex can be traded if limited by a clear price range. In this case, the price oscillates or moves within a fixed range between the Resistance Support level.

To find out whether Sideways conditions are worth trading or not, can be seen by zooming out, or looking at price movements at a higher Time Frame. Does the market appear to be trending, clearly uptrend or downtrend?

If it doesn't look trending, it's a sign that the market is in Sideways condition. If Sideways then determine whether the movement is in a clear range or tends to choppy (irregular).

Seen on the chart above, prices are in a clear trading range between the key resistance level and key support. These levels are the benchmark for Entry and Exit and where we see the possibility of valid trading signals. With a clear range, we can also determine an adequate Risk Reward Ratio, because the possibility of price movements from the Support to Resistance level and vice versa is quite large.


2. Don't trade when the market is choppy
Irregular choppy or Sideways price movements are caused by market consolidation, where the players are waiting for each other. Market conditions like this are unfit for trading because the shape of the Candlestick Bar moves erratically, so it is difficult for us to set an adequate Risk Reward Ratio.

Note that price movements are erratic and do not move within a clear range, Exponential Moving Average (EMA) 8 and EMA 21 curves are also close together and tend to move flat. Trading signals that arise in a choppy state are usually invalid. If such market conditions should not be Entry. Wait until the price movement is trending again or still Sideways but forming a clear range.

Also Read : The Most Powerful and Accurate Binary Trading Indicator

3. Use Price Action in the Sideways Market
If the Sideways condition is accompanied by a clear range, usually the trading method used is False Break Entry or Entry when the price fails to penetrate the Resistance or Support level as in

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