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How to play choppy markets

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How to play choppy markets

How does one handle choppy markets?

Today the EUR/USD appeared to me to start out very choppy (on a 15 or 5 min chart) with little excuse to trade for the 2-5 pip targets offered.  Then of course a huge reaction to the non-farm payroll numbers at 1200GMT and subsequent reversal in favor of the USD.  This was hard to predict yet was worth at least 24 pips for someone who got in on the short side.

One more 10 pip down move and then a rather slow climb back up worth 12-17 pips if you could find a place to get in while the move was at the hard right edge of the chart.  I found myself fearing that I might be "chasing" the market when these moves are starting, then regretting that hesitation as the move continues well past my initial point of hesitation.  Still I do not believe chasing a market has any long term benefit.

My question is; while these moves seem self evident in the middle of the chart, they are far from transparent at the hard right edge.  How does one play these so that they are "in it to win it" when the move finally takes place?  I'm not believing that there is some magic formula to predict the move, but seriously, there must be a strategy that enters on the possibility while protecting profits through the many false starts.

I've tried a momentum breakout strategy, but that tends to set a TP point which limits potential run ups.  It also tends to establish a pretty hefty SL, thus a small position size if the move "takes off".

I've tried trailing stop strategies, which can both limit upside potential if too close, or give back significant profits if too loose.  Either way the strategy seems to contradict the "let profits run" rule.

I get to a point where I'm feeling analysis paralysis and don't even get the 3-6 pips let alone being on the bigger moves.

Any pearls of wisdom out there?



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Fri, 07/07/2017 - 1:29pm