How to Read the Market When Sideways
Sideways are flat market conditions and tend to be full of doubts. This is due to both strong bullish and bearish factors. This condition is also called bullish, which is when the stock market price, bonds, and traded commodities increase for a long period of time. This is because there are more buyers than sellers, so the price also increases. However, the world of trading is like a spinning wheel. Bullish will not last forever, so investors and stock traders must be prepared when a decline occurs or is called bearish. The opposite of bullish, bearish occurs when there are more sellers than buyers. Usually, when this happens, there will be a simultaneous selling or panic selling. In addition to bullish and bearish, there are times when traders are in a sideways phase.
Simple Ways to Identify Sideways Market
To find out the sideways condition, it can be done in various ways. Either by using the tools available in MT4 or by using indicators. How to identify it are:
Using Trendline
Trendline is a tool, not an indicator. Trendline is a tool that is already available in metatrader and is in the form of a diagonal line. In addition to being simple, this method is also practical, where traders only need to draw a line, and sideways can be seen. The way to use it is by drawing a trendline by connecting the waves on the chart. Uptrend, downtrend, and sideways can be seen from the slope of the trendline. If the trend is up, then the trendline is pointing up. If the trend is down, the trendline is pointing downwards. Meanwhile sideways, the trendline position tends to be flat, neither up nor down.
Using MACD Indicator
If the first method is a trader using trendline tools, this second method will use an indicator, namely MACD. The main function of this indicator is to identify oversold and overbought points. However, this indicator can also be used to find out the sideways market. The sideways condition in the MACD indicator is characterized by a relatively small and lined BAR size.
Using Moving Averages
Moving averages are indicators that are already available in MT4. Logic moving average is formed from the calculation of the average price in a certain period. While the main function is to determine the direction of the trend. By far, the moving average indicator is the most favorite MT4 indicator, and the most widely used by traders. Sideways conditions by the moving average are indicated by a flat movement. Before starting to use it, the trader's period is first changed to 20.
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