And this is how you adapt to the market condition


Once Charles Darwin wrote something like this:

“It is not the strongest or the most intelligent who will survive, but those who can best manage change”

And you know something, I believe the same is true for traders:

“Traders that can adapt faster to the market changes (condition) are the ones that get consistent and positive results”

Look, from my point of view, trading is about adapting your strategy to the market condition.

It’s about trying to understand what the market is doing and what it is likely to do.

Once you have that information, you’ll feel confident about your trading plan, because you know what the market is likely to do.

That’s one of the reasons I believe robots and automatic trading systems are NOT the way to go.

You see, when you use an automatic system you trade in the exact same way, every single day, but the market is different from day to day.

It seems to me that, traders using robots or automatic systems want the market to adapt to their trading system… and that will never happen fellow traders… NEVER!

It’s the other way around, you need to adapt your trading system or strategy to the current market conditions.

And that my friends, comes with experience… Here is a good example.

NZDUSD Analysis

Let me show you this chart:


In this NZDUSD Daily chart, everything is clear:

  • clear swings
  • clear S&R levels

But then something happens, the NZDUSD breaks through the support level and you might be tempted to draw an additional level and leave everything else as it is…

It would look something like this:


But that’s not the way to go.

You are using support and resistance levels because the market is actually taking those levels in consideration. If for any reason the market does not take them in consideration, why should you?

So the correct analysis would look something like this:


Once you adapt and get rid of that level, you see a clearer view of what the market is doing and what it is likely to do.

This way you can take better trading decisions.

Your turn

Do you think adapting to the market conditions is important?

How do you adapt to the market conditions?

Whats your take about robots and automated systems?

Please share your thoughts.

Tags: , ,

Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Bala

    Great article Mr. Raul:

    I always believe adapting the market condition is the most important and it is mandatory for any trader. I follow price action and S/R levels in my trading (in the chart, not in numbers). I am very much confident that what ever happens related to price, whether it may be fundamental or technical, first it reflects in price action, also I will be into the trade after the rally begins.

    Robots (I hate, never used and wont, because even creator does not know how it reacts to fundamentals:

    “Mr. Smith yelled at the doctor,
    What have you done to my boy?
    He’s not flesh and blood,
    he’s aluminum alloy!”
    The doctor said gently,
    What I’m going to say
    will sound pretty wild.
    But you’re not the father
    of this strange looking child.
    You see, there still is some question
    about the child’s gender,
    but we think that its father
    is a microwave blender.”
    ― Tim Burton, The Melancholy Death of Oyster Boy and Other Stories

    • Raul Lopez

      Hey Bala! Yep, adapting to the market condition rules!!!!

      Thank you for your thoughtful comment!

  • Chad Hogan

    Good info, and thats exactly what I done. Im still learning to erase levels that are no longer relevant. Sometimes I just leave them as thin blue lines.. hehehe… Thanks RAUL.

    • Raul Lopez

      heheheeh good idea Chad! I’ll try a thiner line…

      Have a great weekend!

  • Ahsun Ashfaq

    Hey thanks raul now it is 100% confirmed that i was trading on the right pair :-D :-P. But it moves so fast than my expectation and now it is very close to its resistance level! and my bad luck i have closed my trade early but it is still 60 pips and 6:1 RR ;)

    Happy Trading :)

    • Raul Lopez

      Well done Ahsun! Congrats!!!!