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Trading Sideways, Choppy or Trendless Markets

Trading Choppy Markets
Written by Andy

Sideways, choppy, or trendless markets can weigh on a traders’ mentality.

When the market is in a sideways trend, trading become a lower probability venture. Trading less and with smaller position sizes protects your portfolio and puts you in a better position when the market turns. It’s the ‘penny spared’ part that puts you further ahead than you may realise.

Consider a food race, Unnecessary losses are like starting the race by going in the wrong direction. Once you decide to turn around, you first have to get back to the starting line before you can catch up to the competitors that left you behind.

When markets are in a sideways trend, even standing still at the starting line is preferable to losing ground. The more trading you do when the market is not advantageous exposes you to greater risk of getting further behind.

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Andy

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