The market is under constant change. The biggest modification lies in the direction of this change. This could be upward movement, could be downward, but could be sideways as well and then you can say the market is flat. And that last situation is the time that many traders are afraid of.
A flat market is known to be quite a bad place to open new trades. While both, upward and downward trends can be used to one’s advantage, a flat market does not leave many opportunities.
It is good to stay away from trading when the market is flat
There are, however, plenty of tasks a trader can perform during waiting for the market to gather momentum. Today, I will talk about a few so that you have a general view of how to make the most out of this waiting period. This is valuable time and you should appreciate it. Normally, that is when the market is trending, you may experience a lack of time for some major checkups and adjustments. So what you can do?
Evaluation of your results
A trading journal is an important tool every trader should conduct. This is a complete record of all the transactions you made and everything that is connected to them. So you should include the conditions on the market during the opening and closing times, which transactions were successful and which failed, what your emotional state was and any other observations you might have.
While on a regular day you can consider reviewing a trading journal as a waste of time, now is the moment you should do it. It is really important to evaluate the results you have worked out. This will help improve your future efficiency.
Economic, political, as well as social situations, influence the market. So whenever the market consolidates, there has to be a reason behind it. And your task is to do some basic research to discover it and use it for future predictions of price movements.
It is not unusual that the market goes flat before some important announcements. Do not forget to conduct an analysis and read economic reports. It may be also a good idea to check the reports of the bigger companies which can affect the behavior of the price on the market.
The last thing in this article, I suggest to do during the time of the flat market is to do your technical research. Maybe you have neglected it before, maybe you were doing it systematically. The thing is, now you have time to do it thoroughly.
Review your trading strategy. What did work and what did not? Check various features and technical indicators. Which are the ones that serve you and which can you skip? Technical analysis can boost your future performance significantly.
Do not be disappointed when sideways movements appear on the market. While it is wise not to open a new position, there is still so much you can do. Use this time rationally and review your past operations. You can learn a great deal from them.
So keep your chin up and go to the action. Focus, read, and learn.