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.
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