MY STYLE - BLOG
Much has been written by many writers and traders about ranging periods.
As a technical trader, I prefer to allow the trading system to manage such days so that trading remains non discretionary and enable automation. What are the ways to handle ranging ? These are some ideas:
1 - Stay away from the market - easiest and most prone to opportunity profit losses.
2 - Put a limit on stop loss loss limit for the day and exit trading for the day.
3 - Enable a well thought out strategy to play itself out. One example of that is to take trades initiated following a cross of a threshold. For example, if RSI or Stochastics does not cross 30/70 or 20/80, do not initiate a new trade.
Option 3 is the most promising and can be used by both discretionary and non discretionary traders for consistent trading. The choice of threshold logic is wide open, and can include what the trader prefers and uses normally.
A fundamental input, that may be used is to stay away from periods that include ranging before a market news event. Thats optional.
Abnash Singh, Am a Trader helping small traders to realize their dreams.