He has a monthly readership of , traders and has taught over 20, students. A simple truth of trading is that markets are often moving sideways, neither trending up or down. Not all sideways market conditions are the same however; some are worth trading and some simply are not. To determine if a market is worth trading, first, zoom out and get the bigger picture on the daily chart time frame.
Is the market trending clearly either up or down? Notice in the chart above, there is a fair amount of distance in between the support and resistance of the range and that the support and resistance boundaries of the range are fairly well-defined. A choppy market is one that is consolidating very tightly. It is not worth trading because the distance the market is moving between reversals is not big enough to allow for a good risk reward ratio.
The best way to determine if a market is choppy is just zooming out on the daily chart and taking in the bigger picture as I discussed above. After some training, screen time and experience, you will easily be able to identify if a market is range-bound or choppy.
In my experience, aspiring traders tend to give back their profits shortly after big winners because markets often consolidate after making big moves. When we find clear range-bound conditions in a market, we can watch for price action buy and sell signals at the support and resistance of the ranges…. Perhaps the best way to trade range-bound markets is the false break trading strategy. By waiting for the market to make a false-break of a trading range, you significantly increase your chances of profiting.
In almost every trading range, there is at least one false-break, and they often create powerful moves in the other direction, back toward the other end of the range. To get more insight into why breakouts often fail, leading to false-breaks, check out my recent article on why breakouts often lead to losing trades. The important thing about failed breakouts or false-breaks of trading ranges, is that they are excellent trading opportunities to take advantage of.
These false-breaks provide great risk reward ratios and are very reliable trades…. Notice in the chart above, there were two very obvious pin bar sell signals at the trading range resistance that lead to significant moves lower into the trading range support.
This is a more advanced entry technique that I get into more in-depth in my trading course and members area and should only be tried by traders who are experienced and educated on my trading method. Trade the sideways market is really frustrating unless you know how to deal with it. Your articles show the way I should trade but was not and blow up my last account.
Now try to preserve capital, take profits before the change into losing position and take obvious setups. Thanks and waiting for next one.
Save your money for a good trade. Should be obvious to us but thank you Nial for reinforcing that trueism. Another awesome article Nial. Hello Nial, Very insightful article, thanks for all your efforts in making we your proteges become a better, disciplined and profitable trader.
I am most grateful for this advice. Always forever your trading strategy is the best. I preserve my capital this time after a profitable trading month!! Have a good day Best regards Adriana. Your email address will not be published.
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Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Determine if the market is worth trading, or not. Sideways markets that are range-bound and thus worth trading, look like this… Notice in the chart above, there is a fair amount of distance in between the support and resistance of the range and that the support and resistance boundaries of the range are fairly well-defined.
What to do if a sideways market IS worth trading… When we find clear range-bound conditions in a market, we can watch for price action buy and sell signals at the support and resistance of the ranges… Perhaps the best way to trade range-bound markets is the false break trading strategy. These false-breaks provide great risk reward ratios and are very reliable trades… Notice in the chart above, there were two very obvious pin bar sell signals at the trading range resistance that lead to significant moves lower into the trading range support.
Often, the best position is no position. Christmas Trading Course Special: Checkout Nial's Professional Forex Course here. Ridwan Sa'at July 5, at 2: Great Nial… I am keen on reading your articles. Ekwe Anthony October 7, at 8: Hi Nial, Great article and advice!!! Thanks for the reawakening Reply.
Wojciech October 2, at 4: Capital preservation is necessary 4 long term success. Gilbert September 30, at 3: This teaching is an eye opener, thanks a lot, Reply. September 27, at 6: Super article, thank you!!! Greg September 27, at 5: Woodrow September 27, at Just what I needed to hear. Thanks agin Nial for this capital preserving article. Margot September 27, at 7: Thxs for all your artikel.
They are very helpfull Reply. Mario Taillon September 27, at 5: Abbati September 27, at 2: Thanks Nial for sharing your experience and making us grow as a better trader. Kingfisher September 27, at 1: Carlos Gradissimo September 26, at You are absolutely right… Take Care, Reply. Khesiwe September 26, at Thanks so much Nial this was a very good article thanks so much Reply. Adriana Ghidau September 26, at Have a good day Best regards Adriana Reply. Leave a Comment Cancel reply Your email address will not be published.
Recent Popular Comments Nial Fuller. Price Action Trading Patterns: Thank you, Nial and team Always valuable, helps me keep on track I can already imagine myself like a forex traider This is a very good article Great lesson Nial It's always good to go back to A great reminder to check on theMore...