I have mentioned several times in my post that when a pair didn't reach its minimum range based on the 20-day average daily range, the market will compensate that "pips shortages" in the following day, in two or three days or the following week.
These small ranges are more common in a flat market, where it is in an accumulation phase. "Ranging market begets trends" was the common belief back when I first started trading. I do not think it's necessarily true BUT I do believe ranging market or market in an accumulation phase, whatever you want to call it, will beget price expansion and more often than not, when the price do expand, it will pay back all the pips shortages few days/weeks earlier.
How can you benefit/what are the actionable you can do from this repetitive yet tend to be overlooked market behaviour? Here are the three things I tend to use this information into my advantage :
1) Liquidity Pool will be there in a day where the range is so small because price is in accumulation phase
2) You can start managing your trades as small ranges particularly after a price expansion, means a retracement or reversal will happen. This gives us opportunities to look for either continuation trades or to move your stops to protect your profits
3) If you have a trading signal during the accumulation phase, you can expand your profit target more than usual as the smaller the ranges in the previous day(s) the bigger the price expansion would be. The smaller the ranges and the longer is the period of accumulation, the bigger the liquidity pool going to be hence the more delicious the price expansion going to be
These small ranges are more common in a flat market, where it is in an accumulation phase. "Ranging market begets trends" was the common belief back when I first started trading. I do not think it's necessarily true BUT I do believe ranging market or market in an accumulation phase, whatever you want to call it, will beget price expansion and more often than not, when the price do expand, it will pay back all the pips shortages few days/weeks earlier.
How can you benefit/what are the actionable you can do from this repetitive yet tend to be overlooked market behaviour? Here are the three things I tend to use this information into my advantage :
1) Liquidity Pool will be there in a day where the range is so small because price is in accumulation phase
2) You can start managing your trades as small ranges particularly after a price expansion, means a retracement or reversal will happen. This gives us opportunities to look for either continuation trades or to move your stops to protect your profits
3) If you have a trading signal during the accumulation phase, you can expand your profit target more than usual as the smaller the ranges in the previous day(s) the bigger the price expansion would be. The smaller the ranges and the longer is the period of accumulation, the bigger the liquidity pool going to be hence the more delicious the price expansion going to be