Easy forex trading strategy in flat markets
Quite often you can find a discussion and description of strategies for trading on the trend, as well as countertrend strategies, although most of the price is in a sideways movement, flat. It turns out that the lateral movement can not make a profit? It is possible and necessary to earn money at lateral movement of the price, but at the same time applying the appropriate strategies. The strategy for trading in the flat is simple and has its own strict rules that must be adhered to during the trading process.
Morning flat is a characteristic state in which the currency market is paired with the us dollar during the Asian trading session. The movement begins to slow down in the period from 9 p.m. to midnight. At this time, a corridor is formed, in which the pair will trade until 8-9 am the next day. TRading on flat can very risking for your money. When I try new forex or binary options strategies, I use no deposit forex bonuses. One of the biggest bonuses is offered by Grand capital. To get $500 grand capital no deposit bonus for forex trading and binary options you have to open bonus account with this broker and make a definite trading turnover with bonus money. Flat (eng. Flat - flat, straight) is the movement of the price of an asset in a lateral range, as a result of leveling and stabilizing, for an indefinite time, supply and demand in the market for this financial instrument. In other words, a flat is a consolidation of the price in the time intervals between the impact of impulses.
It is very simple to determine the state of the flat in the market. If you draw trend lines along the highs and lows of the price chart, they will form horizontal parallel lines. Trading in the channel is effective at such a level of volatility, in which the price fluctuates within the channel, but does not go beyond its boundaries. If the quote breaks one of the levels, it is recommended to close the position. In order to protect themselves from such risks, traders often set limit losses and use limit orders.
If they believe that the price will change direction from upward to downward, they place a sell limit order next to the resistance level and place a take profit near the support level. If an upward correction is expected, they place a buy limit order near the support level and a take profit order below the resistance line. In case of a breakout, a stop loss is set outside the resistance and support. The rules of flat strategy are simple. In the morning, no later than 8 o'clock, choose a currency pair that has been trading in a narrow price corridor all night. Set two pending orders at the flat boundaries-Sell stop at the bottom and Buy stop at the top.
The minimum take profit is the distance equal to the width of the flat. The stop loss for the order is located on the opposite border of the side corridor. As soon as one pending order is triggered, the second one should be immediately deleted.
The recommended timeframe for trading is M15.
Trading broker-RoboForex company. Recommendations for trading within the channel
First of all, you need to follow the rules of money management, even if you are 1000% sure that the price will move in this direction. It is necessary to set stop orders limiting possible losses. As a rule, the stop loss is set a few points below (above) the boundaries of the constructed channel. It is not advisable to use small timeframes for trading inside the channel. Also, if the channel has a very small width, it is better to abandon the trade inside it. When the price passes the distance to the middle of the channel, it is desirable to transfer the deal to breakeven. It is necessary to fix profit when the price reaches the opposite border of the channel or when the price turns against the open deal. To trade profitably within a sideways range, the following conditions must be met:
- The consolidation range should be wide enough. To profit from the transaction within the range significantly exceeded the spread and exchange commissions.
- The range should not be expanding. Since it is impossible to clearly define the boundaries of the expansion, and it is not clear when to close the position.
- The range should not be narrowing. Each subsequent trade will bring you less and less income, and the risk of breaking the level of the range in the opposite direction increases from deal to deal. In fact, it is generally accepted to track a narrowing range in order to open a position for a breakout. The breakdown flat.
Also, you can use the breakdown of the boundaries of the flat, as the beginning of a new impulse movement. You can wait for the breakdown of the channel border, then the moment when the price returns to the broken border for retest and close to this border to set a limit pending order. You can set a stop pending order just below the extremum of the first breakdown of the channel boundary. If the price after the retest continues to move towards the breakdown, this order is activated at a favorable price with minimal risk. What pairs are suitable for trading
The Asian session period is the time of activity for currency pairs with the Japanese yen. They are not suitable for trading on the flat strategy "Breakout of the morning range". The period of minimal activity they have falls at another time.
You should not consider exotic currency pairs for trading. They are too unpredictable and require a special approach.
Other financial instruments can be used to trade on the breakout of the morning flat.
These include all currency pairs (except yen pairs) and metals.