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Trader Thoughts #2 Dealing with Slow Markets

Updated: Mar 7, 2021

Over the past month and a half price has been moving relatively slow compared to the first half of the year. When markets start moving slow its easy to start making mistakes. This is due to the fact traders have a hard time switching from fast/volatile markets to slow and steady markets. I will be the first to admit I am much more of a trader who likes fast moving markets. This is mainly due to the fact I want to be in and out of trades as soon as possible, when markets slow down and instead of being out of a trade in 2 minutes it takes 20 or 40 minutes it is time for me to change up my approach slightly. Lets take a look at a few ways I make this possible.


The Playbook

day trading plan

If your a Gorilla Futures member this is a term you have probably heard me use. That's because you need to have a "Playbook" for each market condition. I personally have three playbooks, one for a slow ranging market, one for a fast trending market ( bullish and bearish) and lastly one for a slow melt up or melt down type of market.


By doing this you allow your self to trade every market with a similar approach just slightly tweaked for each one. An example of different plays in each of your playbooks could be the following. In a fast moving market you are looking for momentum trades with one of our go to signals ( 3 point turn, 2 candle rejection or the engulfing candle). Momentum will need to be defined by each trader, I personally look at momentum as how fast we are moving in either direction combined with the overall trend. There is no right or wrong definition use what works best for you, since it is your playbook!


During a slow moving market or a ranging market I can still use my 3 go to signals mentioned above, I simply need to add a few clauses to the rules. Instead of looking/focusing on trades that have momentum, I will need to focus on trades that line up with the overall trend and are near support/resistance levels. For example, instead of taking breakout trades I will focus on pullbacks that are inline the the current/overall trend.


One of the problems traders run into when trading these different types of markets is the signal. If your a Gorilla Futures member you know that the signal is the last part of the puzzle and many times the signal in both a fast and slow moving market are valid but it all depends on the market structure and the current sentiment.


For example a 3 point turn/swing point is valid in all my playbooks, its the lead up to said signal that is different. You don't need to go and completely change your system for every season of the market simply make small tweaks that are inline with your overall rules/system.


If you are having issues with the current market state, step back and see if you can slightly adjust your system to work in these conditions. Once you've done this take that playbook, print it out and put in on the wall or keep it on your desk to remind you what you should be doing during times like this.


Comment down below if you have a playbook!

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