Many forex traders find it easier to make money in a trending or high-volatility trading environment.
Using the standard buy-low-then-sell-high techniques, strong trends and volatile currency pairs usually give the finest possibilities.
Being consistently profitable when there isn’t much going on, on the other hand, is a bit more difficult.
You must change your volatility assumptions (and thus your position sizing), and the price reactions of your favorite currency pairs become less predictable.
Using your tried-and-true trending tactics can result in losses, which can exacerbate your trading confidence and execution.
Does this imply that you should avoid trading on days with low volatility?
Maybe you should finish your Netflix series or try out new hobbies like streaming and making viral TikTok videos.
Making earnings even when market conditions aren’t perfect for your current techniques is what it takes to become consistently profitable. Fortunately, trading in quiet markets may teach you three skills that can help you become a better trader:
Looking for trade chances when prices aren’t moving as much as you’re used to frequently leads to overtrading, or executing trades even if they aren’t adequately supported by fundamental and technical studies, or if the odds aren’t favorable.
Eventually, you’ll realize that being lucrative requires being more discriminating in the settings you take.
You’ll realize that it’s preferable to wait for one good deal than to gamble on half-baked trade ideas. The discipline you develop will protect you from overtrading and will be valuable in all types of trading conditions.
Consistently profitable traders learn to modify up their trading techniques based on the current market situation, much as a chef changes his menu based on the vegetables in season.
Of all, there’s nothing wrong with specializing on trend-catching methods. However, if you want to remain profitable all year, you must be willing to broaden your skill set beyond the typical “buy low, sell high” strategy.
If you’re just starting started, learn about countertrend, breakout, and range techniques!
When volatility falls, the biggest and most predictable movers in a trending market may not be the best pairs to trade. Trading in a quiet market forces you to look for new possibilities to capitalize on.
Do other currency pairs move with greater predictability than your preferred assets?
Is it preferable to trade during a different trading session?
Should you pay attention to another indicator while looking for low-volatility trade setups?
These are some of the questions you’ll be able to answer if you trade in non-trending conditions enough.
Keep in mind that how you trade a setup is just as essential as the setup itself.
You don’t need to wait for a perfect trading environment if you’ve mastered the art and science of finding setups with favorable reward-to-risk ratios and executing your trades according to plan.