In this weeks live training session I showed how to trade forex in slow markets. Explained in detail in the video recording you can find at the bottom of this page.
At the start of the session, I looked at the fact that current markets have the least amount of volume and movement in the last 30 years.
This started around April 2019 when the average daily range on many pairs reduced by over 40%.
I remember trading the Gbp/$ when the daily average was over 150 pips and it’s only around 5 years ago.
The London break out strategy used to work great because the average overnight movement on this forex pair was usually less than 30 pips. That meant there was a potential 120 pips more to try and catch. If you caught a good entry and chose the right direction then it was relatively easy to make money in a few hours around the London open,
Oh those golden days 🙂 Well there is no point crying about it and YES you can still make money trading forex, you just need to be flexible. I have been trading my M2 method for over 12 years. It’s still basically the same, but I have adjusted it when necessary. Add a few things, taken others away, but usually, I just change the emphasis of what I am looking at.
How to Trade Forex in Slow Markets
Market patterns change and evolve all the time. The secret of being a consistently successful trader over the long term is the ability to recognise that things have changed and to adapt your strategy accordingly.
Here is a decent article on the subject from Nasdaq.com
As they point out, one of the ways to improve your chances is to be careful when choosing which pairs to trade. Yes, the Gbp/$ might only be moving around 50 pips a day, but the Gbp/Aud is around 3 times greater at 150.
Do NOT go crazy and start tradings exotic pairs like the $/Nok or $SEk for example, yes they might give the movement BUT then you run the serious risk of suffering heavy penalties because of the swap (overnight interest rates).
Do NOT be greedy. If price is only moving 30 pips a day then setting a 250 pip target is way too optimistic. If you believe it can go a long way then consider taking some of the profit off, move the stop to entry and then let the balance run. If it is a negative interest currency then make sure that the interest cost does not eat away too much of the profit. At the very least, once the swap cost is equal to the profit, think hard about closing the trade.
How to Trade Forex in Slow Markets
Another option when markets are not moving much is to “range trade.”
Place horizontal lines above at the top and bottom of the current range and sell at the top and buy at the bottom.
All explained in this weeks live session recording.
Here are a couple of articles to help you if you are not sure about “swaps” and their overnight interest fees: Global Prime Swaps
Here is a more detailed explanation of How to Calculate the Fees
If you just want to listen to Pierre’s Earth & Sky analysis then he started his presentation around 38 minutes into the video:
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute, updates do not forget to drop by the forum in Pierre’s corner.
Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.
Click on the square button bottom right to watch in full-screen mode.
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