ETH Key principles of trading in different market phases
As is known, the market has two types of states:
When it is trending (distribution phase)
When it is in a range (accumulation phase)
The regularity is that the market will ALWAYS transition from one state to another. The trend will always give way to a range, and after exiting the range, a new trend will emerge.
Knowing this, a trader must learn to trade in both market states and build their trading system based on continuous practice.
In the distribution phase, when the market is dominated by a trend, a trader should look for opportunities to open positions in the direction of the trend. In this case, technical analysis should be used to determine entry and exit points from positions.
In the accumulation phase, when the market is dominated by a range, a trader should be cautious and wait for opportunities to open positions. In this case, a broader market analysis, including fundamental analysis, should be used to determine the most likely direction of price movement.
The key element of successful trading is continuous practice. A trader should constantly test their trading system and analyze their mistakes to improve their results. It is also important to keep an eye on current news and events that may affect the market and adapt their strategy accordingly.
Overall, a trader should be flexible and ready to adapt to changes in the market to achieve constant growth in their results.
When it is trending (distribution phase)
When it is in a range (accumulation phase)
The regularity is that the market will ALWAYS transition from one state to another. The trend will always give way to a range, and after exiting the range, a new trend will emerge.
Knowing this, a trader must learn to trade in both market states and build their trading system based on continuous practice.
In the distribution phase, when the market is dominated by a trend, a trader should look for opportunities to open positions in the direction of the trend. In this case, technical analysis should be used to determine entry and exit points from positions.
In the accumulation phase, when the market is dominated by a range, a trader should be cautious and wait for opportunities to open positions. In this case, a broader market analysis, including fundamental analysis, should be used to determine the most likely direction of price movement.
The key element of successful trading is continuous practice. A trader should constantly test their trading system and analyze their mistakes to improve their results. It is also important to keep an eye on current news and events that may affect the market and adapt their strategy accordingly.
Overall, a trader should be flexible and ready to adapt to changes in the market to achieve constant growth in their results.
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