When a smart and a stupid person go to war, the stupid one, recklessly rushes into battle without thinking through the details of the forthcoming plan of action. He is like a hungry person who greedily pounces on his favorite dish in a buffet.
On the other hand, an intelligent person will first try to get the most detailed information about the current situation and carefully study those details that can affect the outcome of the battle.
Same like military planning, we also need to carefully monitor and study the current market situation in which we trade. In other words, it is very critical for us to know what is the current state of the market and the condition around it. Some traders openly admit that their strategies are ineffective.
Why Strategies Fail?
Indeed, there are times when a strategy fails. The fact that it has shown itself to be potentially profitable in the past does not mean that, given the current market situation and external factors, its application will be as practical as in the past.
Experienced forex traders always strive to build the most optimal strategy for behavior in the stock market, which would maximally consider all possible scenarios for the development of exchange events in real-time.
Isn’t it time to get rid of misconceptions about market mechanisms and find new levels of correction or expand investment ranges?
Just as a coach predicts different options for developing the game for specific situations or opponents, you also need to be sufficiently prepared to decide which strategy you will use depending on market conditions.
Considering all the market factors in the area of interest of your trade, you can choose a strategic direction based on both a trending market and a range strategy within the market.
Feeling Fear to Trade?
Are you cautious that you won’t be able to use your aggressive pressure as part of a range strategy? How about responding to this intimidating system with an “I’ll come home victorious!”
The foreign exchange market provides you with many options for using all kinds of trends and equally many cases of their application in different time frames when the strategies you choose can be implemented.
Based on the knowledge of which of the known strategies can be applied, it will be more comfortable for you to distinguish which of the market instruments in your trading platform are the easiest to manipulate at the moment.
For example, candlesticks and trendlines are useful during the trending markets while pivot points, support, and resistance levels will be relevant when the markets are flat. Before identifying all these possibilities, you must make a correct identification of the current state of the market and the conditions in it. Market conditions can be divided into three main scenarios:
- Downward trend
- Flat or sideways
It is very important for traders to learn whether the market is now trending in upward direction on in the downward direction or even if it is moving sideways. Mostly during sideways movement, traders refrain from trading or switch to smaller time frames to find the trend.