1. Sense of urgency - Refer to the chart above, before the dotted black line no one has any idea the market is going to range across, this is when you must take a step back and re-assess the market condition. Let the market do whatever it wants until you have a clue about it.
2. Trading the continuation pattern - One of the biggest mistakes I realize new traders constantly make is trading the continuation pattern during a range bound condition (Eg. flag, , etc.). Yes, indeed sometimes it might works, but think deeply about the concept & purpose of an exhaustion pattern, it is to catch the fresh momentum after a temporary pause in the market. Why would you take momentum patterns within a range, when buyers & sellers are clearly agreed upon certain price range? It simply doesn't fulfill the risk-to-reward in your expectation.
3. Misuse the patterns - patterns only work when you use in the right context. Imagine you taking a short just because there's a in a parabolic uptrend, does it make sense? Avoid overthinking about patterns, it simply tells you what happened within the time period. Always utilize it correctly.
4. Fail to identify the area of value - The most important thing about range trading is identifying the area of value ( zone). Identify where you think you could safely lean your SL against, and have a realistic target.
5. Chase the breakouts - In the live market, there'd be tons of spikes near the zone, avoid chasing them to prevent unnecessary losses.
1. Trade the higher timeframe - During a range bound condition, personally I would avoid trading the lower timeframe (1min - 15min charts). Simply because a breakout on the lower timeframe could be a regular wick rejection on the 1h chart, avoid going down to lower timeframe especially if you are an aggressive trader like myself.
2. Pending order - Identify area of value where you'd like to get involved in the market, place a pending order, allow the market to come to you instead of you chasing it.
3. Widen your SL & realistic target - During a range bound condition, it is always safer to have your SL at a sensible place and have realistic target. You cannot expect to have a 1:5RR trade in a range bound condition, avoid being greedy.
Trading is never easy, but being patient allows you to have a calm mind to read the market. Trade safe.
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