The markets can be a crazy thing, huge movements up and down, huge spikes in volatility, and subject to a whole host of outside news and events that can rapidly shift them both up and down. However, there are also times when the markets are at a standstill, this is the first time for a trade as nothing is really happening, the markets are sat still, nothing is coming into range of your strategy so you really don’t have anything to do. This is the scenario that a lot of traders come against at least a few times a year, so we need to be able to know what we can do when the markets are in this situation, and to understand that there are still some things that you can do to help you improve your overall trading.
Something that we often find that a lot of people lack, especially those that are new to the market. The need to always be doing something, whether it is analysis or actual trading, it can be a strong impulse. Having a low market gives you the perfect opportunity to practice being patient, and let’s face it, it isn’t giving you much choice. Being patient does not necessarily mean just sitting in front of the computer waiting, it can also involve doing something else entirely, away from the computer or on. Being selective in your trades is a good trait to have anyway, so this is a good way to help teach you to wait and take the trades that match your strategy.
Being able to wait for the right trade instead of acting on patience is such a vital skill to learn, so take this opportunity to learn it, it will greatly improve your future trading even in more busy market conditions.
It is normal to be required to adapt to the changing markets, they are constantly moving up and down and you will need to be able to adapt to that to adjust your strategies, however, another thing that you need to be able to adapt to is when a market decides to slow down or even flatline. This could be about adapting your own perception and staying put, which ties in with patience that we mentioned above. Another way to adapt is to have a backup plan when your pairs are deciding to not move, is there anything else that you can move onto? Maybe there is a commodity or a metal that you are interested in, often when the currency markets have stopped, there is still a bit of movement in the others.
Of course, looking at a new asset to trade would require changes to your strategy and also learning how they move, but having these other options available will make it a lot easier for you to adapt and change when things are a little slow.
Having a flexible strategy or even more than one strategy will help you to be flexible when the markets are not behaving nicely if you can have a strategy available for when it is trending and one for when it is a little more stagnant can help you to find trades no matter what is happening. If you wish to be trading all year round, then you will need to be able to flex your strategy to suit all possible market conditions, so allowing yourself to have those additional options would be a huge benefit to your overall trading plan.
We all have different learning styles, some learn from sitting and reading while others learn from actually doing. If you learn from actually trading then these quiet periods could be a nightmare for you as there is nothing to do. In a situation like this, it is important that you have a look at various other ways of learning, this will help you to learn new ways to study which would then give you the opportunity to learn even in these slow times. It can be hard, it can be a little boring, to begin with, but after training yourself on new ways to learn, it will be a huge benefit in the future.
So those are a few things you can do and learn during a slow market, while it can be a slow time for trading, there are certain things that you can try to learn and teach yourself to help you get through those slower periods.