Should you trade consolidation? Well, the real question is are you a consolidation trader? If so, what does consolidation trading look like to you?
Not all traders will have the same answer because no trader knows when consolidation will form until it happens. What you will do when it happens is solely based on what you believe to be true based on your beliefs about trading and your trading strategy.
What is a market condition?
A market condition is a type of way the market moves. Much like the weather outside, you dress based upon the temperature outside and you choose your style of clothing.
You can't control the weather, but you can control what you do. Much like you can't control how price moves, but you can control how you trade it.
The way price moves determines the strategy you choose to trade it based on your trading style.
When consolidation begins forming you may notice a few things such as:
1. Its hard to gauge the price direction
2. Price moves sideways between an extreme high and low for an extended amount of time
3. You may be stopped out more often or have to wait longer before placing a trade if you are a trend or breakout trader
4. You may trade well within the ranges of crazy price movement in between the extreme high and low prices.
The bigger question to ask yourself when you notice consolation forming is do you do well in this type of market?
If so, what are the steps to trading this type of condition?
Do you look place horizontal trend lines?
Do you look for patterns such as wedges or flags.
If no, the current currency pair or asset will be best to ignore til it begins to trend again in your favor. What will that look like?
Is it a break out of the horizontal trend lines?
Is it a break out of your pattern?
Either way, as a trader, it's best you determine what consolidation looks like to you and decide to trade it or not to trade it. Construct steps around how you trade it and position your risk size according to this type of condition.
For me myself personally, I do not trade consolidation. I am a trend trader and my motto is, if I'm not in the trade before consolidation forms, I'm not trading at all.
I also don't create consolidation strategies. Thats just me personally. It helps with me mental capacity and keeps me focused on what works for me.
I'd like to know, do you trade consolidation and if so, whats your best strategy.
Lastly, thank you for reading my post. Be sure to like it. It lets me know you enjoy reading what I love talking about in my free time, trading. ❤️
Not all traders will have the same answer because no trader knows when consolidation will form until it happens. What you will do when it happens is solely based on what you believe to be true based on your beliefs about trading and your trading strategy.
What is a market condition?
A market condition is a type of way the market moves. Much like the weather outside, you dress based upon the temperature outside and you choose your style of clothing.
You can't control the weather, but you can control what you do. Much like you can't control how price moves, but you can control how you trade it.
The way price moves determines the strategy you choose to trade it based on your trading style.
When consolidation begins forming you may notice a few things such as:
1. Its hard to gauge the price direction
2. Price moves sideways between an extreme high and low for an extended amount of time
3. You may be stopped out more often or have to wait longer before placing a trade if you are a trend or breakout trader
4. You may trade well within the ranges of crazy price movement in between the extreme high and low prices.
The bigger question to ask yourself when you notice consolation forming is do you do well in this type of market?
If so, what are the steps to trading this type of condition?
Do you look place horizontal trend lines?
Do you look for patterns such as wedges or flags.
If no, the current currency pair or asset will be best to ignore til it begins to trend again in your favor. What will that look like?
Is it a break out of the horizontal trend lines?
Is it a break out of your pattern?
Either way, as a trader, it's best you determine what consolidation looks like to you and decide to trade it or not to trade it. Construct steps around how you trade it and position your risk size according to this type of condition.
For me myself personally, I do not trade consolidation. I am a trend trader and my motto is, if I'm not in the trade before consolidation forms, I'm not trading at all.
I also don't create consolidation strategies. Thats just me personally. It helps with me mental capacity and keeps me focused on what works for me.
I'd like to know, do you trade consolidation and if so, whats your best strategy.
Lastly, thank you for reading my post. Be sure to like it. It lets me know you enjoy reading what I love talking about in my free time, trading. ❤️
