How can I identify and stay away from choppy markets or when the market is about to get choppy
Am a daytrader i trade only the Eurusd though am still testing and developing My strategy I make good trade when the market is swinging or trending sometimes I catch up little pips when the market is renging in good shape.
But I encounter this challenge each time I fall in to a choppy trade I found my self stock in one trade through out the day sometimes till the next week before I get stop out
Choppy markets condition is like a trap to my strategy I always get stop out and false signals each time I fall in to it. Please I need help on how to fillterout or way to deal with this market condition
When your strategy doesn’t give proper trade signal, stay away from trading. It happens with every strategy. Do not force yourself to open trades. Open trades only if your strategy permits it.
It seems tome (and to other traders who do more intra-day stuff than I do) that EUR/USD is ALWAYS a choppy market.
That said, as the opposite of choppiness is trendiness, MA’s should be a useful guide to whether the chosen market is trending or choppy. For example by using their slope direction, sequences, intersections with longer time-frame bars, frequency of cross-overs etc. etc.
When a market is choppy, I stay out.
Maybe try to look at the volume. I dont know though. I just take them on the chin for my testing.
Currently in our global Covid 19 environment, the fate of USA lies in whether and when they can get their economy back to norm - whatever that is, which probably depends on the public trusting Biden to pull them through to more prosperous times, and without engaging in a war with China.
Thus USD pairs will be volatile and reactionary to news items more so than in the past. These market reactions could be mostly short, but expect more retracements as the norm.
I limit trading USD to NZD & AUD, except when it’s a cold slam dunk against MXN, and against JPY when the trend and sentiment is clear as follows: Dollar weak, sell, dollar strong, buy.
Well, it is exactly what we all are after. If someone were able to stay away of choppy markets or indenfy when they are going to get into that, that someone would be the richest person in the world.
Don’t get frustrated, you aren’t alone. Keep researching. Hope you finally find some system that lets you identify that in an important percentage of the times.
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You cannot avoid market conditions at all. You have to learn how you can take advantage of those market conditions to make profits. Different market conditions require you to work differently and you will be able to achieve great results only when you know what you are doing.