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Sideways trading: Open the trade at the price where you would place a Stop Loss order.

05.02.2015 19:49 (London time)
Are you considering trading markets which move sideways? The following article will try to familiarize you with some key factors you have to consider in order to be successful. The most important info is highlighted in bold.

For most of the time markets tend to trade sideways. Dynamic price movements usually last for much shorter periods. During the time when markets move sideways the so called "investment energy" is being accumulated. This may lead to strong dynamic price movements. How to utilize this to your benefit depends on the type of the trader and/ or investor you are and your preparation.

In this article I want to share with you the basic principals how can you look at the sideways trading. We will gladly explain additional trading approaches and how to combine them during our training programs PTA Personal Mentor (individual or group) and PTA Trading Floor (trading room with actual signals and trades).

Generally it is beneficial to enter into the trade at the top or bottom of the established price range. If you were unable to open the position (e.g. because of fear) at the edges of the trading range do not chase it. Don't be tempted to enter the trade during strong movements within the trading range because you might get caught on the wrong side of the trade. If you identify sideways trading pattern either from a 5 minutes or 4 hour chart, do not rush anywhere. Normally it is beneficial to open the position at the price which you think is about to break through the price range, ie. in places where you would set a Stop Loss order. However, when sideways price pattern goes on for a longer period, be careful since it is prone for the more dynamic movements out of the range. Generally sideways trading pays off during earlier, young stages of its development. How can you identify the sideways pattern easier and soon enough? Which pattern is still young and which one is too old? All of this information is thoroughly explained during our training programs PTA Personal Mentor or PTA Trading Floor (feel free to contact us and ask more). As a general rule it is not practical to open the position anymore when the price starts its move towards the middle of the range.

Upon entering the trade, eventually we have to exit it at some point. How and when to exit the trade is more important than the actual entry because it determines whether you earn or not. In sideways market your positions should be planned for the shorter time horizon. This phase of the market is suitable for intra-day traders. Take your profits quickly. Do not expect that you will taking profit from the entire trading range. Correctly set objectives are paramount to the successful trader and investor. How to set them depends on a number of factors... If the trade goes against us we need to have a well defined strategy for its closing, this is where our Stop Loss order comes to help. Several factors determine how and where to set up a Stop Loss order. Among the main factors for setting up a Stop Loss order is volatility, risk management, account size, risk per 1 trade, position sizing, selection of an investment instrument, whether the market is trending or not etc. Yes, even if you want to make money from sideways trading, it is important to understand and review the market from a broader 
perspective and have a clear idea about trend and its direction.

Be aware of the fact that sideways price pattern may have various structures and slopes. Most of them are inconsistent which leads beginners to wonder that the market moves strangely and unpredictably. In such sideways market stages most of what you know from the classical conventional technical analysis is undermined, particularly during low timeframes. It is worth to monitor higher timeframes and appropriately adjust trades within the rangebound zone. Additionally, the behavioral technical analysis helps to better understand price developments and improve your business plans.

What tools of technical analysis should be used during sideways market? Commonly are used oscillators which indicate overbought or oversold conditions such as the Relative Strength Index (RSI). Keep in mind that the market will neither move sideways nor trend forever, therefore we should consider and implement additional approaches to our trading. I call them also filters. Combining multiple filters, by that I mean tools, approaches and perspectives you can significantly reduce the risk. By filtering out trades that I realize I am concentrating on the best (quality) opportunities market offers. I believe that the secret of a successful trading is not in the frequency of the trades, rather in the quality of an opportunity I am able to identify and utilize.

I wish you successful and prudent trading decisions.

PS: I believe that my article has offered you the insight into our decision making process when we are making trading and investment decisions (bold) in PTA Trading Floor. My goal is to prove to you that not all what internet has to offer is scam or a misleading information. Many people have doubts about what we know and what kind of support we offer. The text above is just a small example of what we can explain in depth. 
Actuall trades are presented to the clients of PTA Trading Floor where we were able to earn little over 70% for the period of less than three years. Become a member of this trading group because being alone in the world of finances may not pay off to you at all. 

Author: Peter Vostinar, Roman Krska

This message is only educational in nature and should not be considered as an invitation or recommendation to buy, sell or hold any investment instrument. The results of the previous period does not represent a guarantee for future development. Trading or investing in financial markets is risky. The possibility of loss is evident, cannot be excluded and every trade is associated with some risk. Before deciding to invest, please read Risk Disclosure and Legal Notice and most of all get ready through education.

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