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Trading Strategies for Market Types

This document discusses different types of markets and how to trade them. There are two main types: 1) Nontrending or sideways markets, which oscillate between an upper and lower range. These should be traded by buying near the lower range and selling near the upper range. 2) Trending markets, which can be strongly trending or weakly trending. Weak trends may see corrections that could hit stop losses, so it's better to buy dips rather than breakouts. Strong trends allow buying breakouts but with stops below entry to catch dips. The key is identifying the market type and trading accordingly.

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ravi lathiya
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170 views1 page

Trading Strategies for Market Types

This document discusses different types of markets and how to trade them. There are two main types: 1) Nontrending or sideways markets, which oscillate between an upper and lower range. These should be traded by buying near the lower range and selling near the upper range. 2) Trending markets, which can be strongly trending or weakly trending. Weak trends may see corrections that could hit stop losses, so it's better to buy dips rather than breakouts. Strong trends allow buying breakouts but with stops below entry to catch dips. The key is identifying the market type and trading accordingly.

Uploaded by

ravi lathiya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

MARKET TYPES

Market Types - Nontrending or Sideways and Trending.

Any market at any point of time on any timeframe can be classified as Non trending or sideways
market and Trending [Link] type of market requires a different way to trade [Link] trader with
sufficient screen and chart experience knows what type of market we are in....let us see how one
trades them.

1) Siideways or Nontrending [Link] markets oscillate between the upper range and lower
range so the way to trade them is buy near the lower range and sell near the upper [Link] could
be achieved by trading on VWAP bands,failures of the boundaries breakouts etc.

2) Trending Markets : Trending market could be devided into strongly trending markets like the
ones we are having for last couple of days or weak but definite trends which we were having for last
few days.

Once we know that we are in weak trends,trading breakouts in such trends will invite more stops
being hit...as the trend is weak, the moment we buy a breakout,the market goes up a little and starts
its intermittent correction and hits our stoploss if it is kept too low...the correct way to trade is if we
are in a weak uptrend,don't buy breakouts...weak uptrend will give 25-30 points correction in Nifty Fut
and if we buy here and keep a stoploss of 20 points, there is a good chance that the trade will work
and we get into the weak but definite trends......

In strong trends,buying breakouts is a good way of trading but better RR is achieved if you buy a 15-
20 ( again taking example of nifty future )points dip and keep stoploss of 20 points below our
[Link] a strong trend day we will get shallow corrections so don't wait for deeper corrections..One
can also buy 50% on breakouts and 50 % on shallow corrections that if correction does not come we
have some position in place.

One day the trend is going to reverse and we will hit our 20 points stoploss but before that we will be
riding the trend and put sufficient points in our pocket already. On reversing the trend, we reverse the
above process, so instead of buying dips and corrections we look to sell rallies...

If traders follow the above, they don't need fancy softwares,systems .A simple price chart will do and
we will have more profitable traders.

The above is no great discovery ,nor it is a rocket science....a simple observations and methods work
the best in the markets...

Smart_trade

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