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In today’s episode, you’ll discover how to spot trading opportunities even in a boring market.
So tune in now…
Hey, hey, what’s up my friend? In today’s episode, I’ll be talking about how to spot trading opportunities in a boring market.
What do I mean by boring? It refers to the market in a low volatility environment where it isn’t going anywhere, maybe due to seasonal tendencies like the end of the year, summer holidays, etc. So how do you trade such market conditions?
Here are a few tips for you.
1. Change your timeframe
Here’s the thing, if you see that the market is boring on a daily or a weekly timeframe, you can change the timeframe to let’s say, the 4-hour or even the 1-hour timeframe, where things will look pretty different.
They will be a range for you to trade, there will be price structures that you can look to trade from which were previously not visible to you on the higher timeframe. So the first tip that I have for you is to change your timeframe.
If the daily weekly is boring, try going down to the 1-hour timeframe, the 4-hour timeframe, and you might get a different perspective altogether.
2. Adjust your trading strategy
Maybe on the higher timeframe, like the daily, you’re used to trading breakouts or used to trading higher volatility market environments.
But when volatility dies, you kind of get confused, and you’re lost, thinking if you should be buying or selling, or to stay out altogether.
In such market conditions, I have something for you to consider.
Let’s say the daily timeframe is in a low volatility environment, where the range of the candles are pretty small and it seems difficult to make buying or selling decisions, you can go down to a lower timeframe, maybe the 15-minute or the 1-hour timeframe.
Because when you see such a tight consolidation on the higher timeframe, then chances are, that tight consolidation is a range on the lower timeframe where you can plot out your support resistance or the highs and lows of the range.
Once you have plotted out the highs and lows of the range, you can look to buy at support, and sell at resistance. Now I know this is asking quite a bit from you because you kind of transit from a higher timeframe trader to almost a day trader.
So again, do this only if you’re comfortable and this is just a suggestion to change your strategy according to the timeframe. If you’re not comfortable switching from a higher timeframe to a lower timeframe, then guess you don’t have to trade that particular market.
3. Trade other markets
Because if the forex market is boring, it doesn’t mean that the stock market, the cryptocurrency market, or the futures market is boring. Because those markets might have volatility which is favourable for your trading style.
Don’t just focus on one market or just trade a particular stock, There’s are a lot of markets out there and these days as a retail trader, a single brokerage platform can give you access to many markets.
Keep your eyes peeled open to opportunities out there. Don’t just stay to stay comfortable with one or two sectors, because there’s a lot out there.
If you don’t want to get out of your comfort zone, then the next thing you can do is to research. Take this time to research new trading strategies, to look through your trading journal and see how you can improve on things.
Even if market conditions are not favourable to you, it doesn’t mean you cannot be productive. You can always research new strategies, maybe breakout strategies, mean reversion strategies, trend following.
You can always study your trading journal and see how you can make tweaks and improve your trading results. That’s another thing you can do.
5. Go fishing
If you don’t want to be trading, and market conditions are not favourable, then hey, guess what, you don’t have to be trading. You don’t have to force trades.
When market conditions are not favourable, you can go fishing, or go and do the things you love. Come back again when the markets are more favourable to your trading strategy.
And the last thing to bear in mind is this:
Prepare for the next big move
Yes, markets can be boring now. But every market has its cycles, where it moves from low volatility to high volatility environment. And the key thing to note is that it won’t stay boring all the time.
In fact, the more boring it is, the greater likelihood that you’ll expect explosive action in the coming future. If we’re in a low volatility environment, then it’s likely that volatility is about to pick up and transit into a high volatility environment, vice versa.
Don’t expect the markets to be boring forever. Keep your eyes peeled, stay alert to any potential trading opportunities that could come any time soon.
Here’s a quick recap…
- Change your timeframe if the market is boring
- Adjust your trading strategy
- Trade other markets like stocks, futures, forex, etc.
- Research new trading strategies and go through your trading journal
- Go fishing if there’s really nothing for you
With that said, I wish you good luck and good trading. I’ll talk to you soon.