How To Trade In A Consolidated Market

[moonchild]

To refresh our mind on the three types of markets that we have, here we go.

1) Uptrend Market
2) Downtrend Market
3) Consolidated Market

In these article we'll be talking about consolidated markets, it is the situation where the markets doesn't move up or downs, it just keeps on moving sideways without any specific direction, a log of traders call it ranging markets and you have these kind of situations a lot in Forex market.

So, now the question is, how do you navigate through these trouble waters of ranging market.

First thing first, make sure the consolidation started on a high time frame and don't bother with consolidation on lower timeframe, like the thirty minutes or even one hour, if it's not 4 hours or daily, don't even bother with the consolidation at all.

But if it is from the above timeframe the best thing you can do is, go to lower timeframes and draw out your support and resistance, that is pretty much the strategy needed to trade this kind of market, and make sure you sell at resistance and buy at support, put your stop loss just above your zone and keep up with the trend on the higher timeframe, so as not to get stopped out.

 

[Jack Reacher]

Proper SL and TP use, making portfolio, maintaining risk managemnet and handling volatility will save us from high collapses. Eurotrader allows traders with numerous trading facilities along with an adorned educational program too. They offer traders different account types with a 111% deposit bonus.