How to trade Choppy/Sideways Market

During one of my trading session, a student told me
"Sir I am a small trader , I make good money in trending market but when market goes sideways/choppy i lose my profit and most of my trading capital".

I asked him, Do you know the difference between trending and choppy market, He said Yes. Than i said "Why you do not stop trading when market are choppy" , He did not have any answer.  I continued saying its not a problem with you in particular but with most of traders and summarized it as
"Many traders trade during choppy market condition because they feel that ‘itch’ to be in the markets all the time. they think they’ll miss out on opportunities if they don’t trade all the time. Don’t worry about ‘missing out’ on opportunities, the market is not going anywhere and it’s better to be slow and methodical than fast and impulsive when it comes to trading your hard-earned money in the markets."

What exactly is a ‘choppy’ or market?

First off, in order to know the best times to avoid trading , we need to be able to distinguish between market conditions that are worth trading vs. those not wroth trading. So, this involves having a thorough understanding  how to visually observe this price action and determine whether it’s trending, range-bound, or chopping sideways.
Continue Reading