Statistics like "the market only trends 30% to 33% of the time" are thrown around. Whether that's true or not, I don't know. But suppose that the markets trended half of the time. That would still mean the 50% of the time the markets were range-bound.
I further suspect that the numbers above are correct because of the number of small
traders in the forex market. Small traders have a way of disrupting trends.(That's why the large institutional traders don't like them!).
One way or another, however, we know that the market is trendless a significant amount of time. If you continue to try to trade a trend system during these times, you'll either get no trades (if you're lucky),or you'll get a lot of choppy losing trades.
A better way to go about this is to use a counter-trend trading system. A counter-trend system looks to do the "impossible".It looks for the high and low in a market. It figures that if it finds a high or low, the market will reverse from there (because it's trendless) and you'll have a good trade.
So what is a good counter trend trading system? I'd recommend starting with Bollinger bands. The basic principle is to trade tags off of the upper and lower bands.
However,if the market is in a trend, you'll get eaten alive.So it's necessary that the bands be totally flat or almost flat.
I further suspect that the numbers above are correct because of the number of small
traders in the forex market. Small traders have a way of disrupting trends.(That's why the large institutional traders don't like them!).
One way or another, however, we know that the market is trendless a significant amount of time. If you continue to try to trade a trend system during these times, you'll either get no trades (if you're lucky),or you'll get a lot of choppy losing trades.
A better way to go about this is to use a counter-trend trading system. A counter-trend system looks to do the "impossible".It looks for the high and low in a market. It figures that if it finds a high or low, the market will reverse from there (because it's trendless) and you'll have a good trade.
So what is a good counter trend trading system? I'd recommend starting with Bollinger bands. The basic principle is to trade tags off of the upper and lower bands.
However,if the market is in a trend, you'll get eaten alive.So it's necessary that the bands be totally flat or almost flat.
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