This is the best way to trade when volume is low

Hello Traders, how is everything with your trading?

In the last couple of months, the volume has been low, and its not that it is more difficult to trade, but you need to adapt your strategy, and trade accordingly.

With this volume, you cant expect to get large swings, the market gets some gains on one session, then it goes down on the other, and so on and so forth.

So what’s left for us? How can we trade when the market is like this?

The answer is very simple Traders!

Look for short term ranges, and trade if you get upward/downward pressure around either extreme of the range.

That easy!

Why is it that when volume is down the market trades in ranges?

In order for the market to break through important level it needs strength! It needs a lot of traders to agree in the market direction.

Therefore, when liquidity is low, its impossible to find that strength. It is very difficult for the market to break through previous highs/lows.

All clear?

So just look for a clear range, that is, clear levels on both sides of the range (at least two rejection on both sides of the range).

Even if the conditions aren’t clear on the long term chart, when ever you see a range, you can trade it!

Let me show you how!

This is the GBPUSD 4H chart:

GBPUSD 4H

In this case we’ve got a ver clear 4H range! If you feel comfortable trading the 4H chart, just look for a pattern with significant pressure on either extreme of the range and trade it!

Here is another one:

This is the AUDSGD 1H chart:

AUDSGD 1H

Same thing, it’s got both, a clear resistance and a clear support level. So you can look for trade opportunities on either extreme of the range.

So this is the strategy

Look for a significant pattern with downward pressure around the upper extreme of the range. Go short if you get that pressure, and TP a few pips above the lower extreme of the range.

Look for a significant pattern with upward pressure around the lower extreme of the range. Go long if you get that pressure, and TP a few pips below the upper extreme of the range.

If you don’t see a clear range, look for it on another instrument.

You can do the same thing with commodities, indices, stocks, CFD’s, Forex, etc.

What do you think?

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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 .

  • Eric Aroh

    Hi Raul,
    Excellent advice. I have been trading ranges for 3 weeks now. I scale into winners to improve on the R:R. Thanks for the write-up. Eric

    • Raul Lopez

      I’m glad you liked it! I have a feeling though that the volume could pick up soon…

      What do you think?