Understand the Trading Environment

When two people go to combat, the foolish man always rushes into battle without a plan, similar to a hungry man at his favorite buffet.

The smart guy, on the other hand, will always obtain a scenario report beforehand in order to understand the surrounding circumstances that may influence how the conflict plays out.

We need to acquire a situation report on the trading environment, just like in warfare. This necessitates an understanding of the current market climate.

Some forex traders bemoan the fact that their system is ineffective.

The system might be frustrating at times.

Other times, the method has the potential to be profitable but is being used in the incorrect trading environment.

Seasoned forex traders try to figure out the best technique for trading in the present market conditions.

Is it time to break out the Fibs and start looking for retracements？ Or are the ranges still holding？

You should be able to choose which approach to apply depending on the trading environment, much like the coach comes up with different plays for different situations or opponents.

We can adopt a trend-based strategy in a trending market or a range-bound strategy in a ranging market dependent on the market environment.

Are you concerned that you won't be able to use your fearsome range-bound strategy？ How about your trend-based Bring-Home-Da-Bacon system？

Do not be alarmed!

The forex market offers a variety of trending and ranging chances for these methods to be deployed across various time frames.

Knowing which techniques are suited will make deciding which indicators to use from your forex toolbox much easier.

Fibs and trend lines, for example, are useful in trending markets, whilst pivot points, support and resistance levels are useful in range markets.

You must first be able to evaluate the trading environment before you can spot those opportunities.

The current situation of the market can be divided into three categories:

• Trending upwards

• The downward trend is continuing.

• Ranging