When a trader is going to predict the Options market unification, he or she can predict right and he or she can predict wrong. Many investors think that if there is any way to predict market consolidation. This is possible to forecast the consolidation, but there is no surety that the prediction will be right. After a trendy step of the market, the prices come to a time frame where they do not move so much this is called consolidation. You can assume it as a flat period and the market becomes calm before a quick move. The investor will not show interest to trade during this time because the price movements are so slow, and they will not able to grab the right chance after so many efforts.
In this situation, a person can apply different types of techniques and strategies, but all will be valueless. He or she will able to understand the conditions of the market and might be lost his or her capital. Actually, there is no full-proof plan for identifying market consolidation, so most of the traders face failure. The investors who trade with the trend face a great loss during the time of unification. By understanding the past price movements of the currency pairs and observing the previous and present situation of the market, people can predict future consolidation. There are four ways of doing this. Let’s know about them.
Know the Major Price Levels
The businessmen should know about the support and resistance level as this is crucial for the person to be a trader. When the value of the currency pair will hit the major support and resistance level, the investors should be ready for a consolidation period as trendy movements have already happened. People will find the major support and resistance level monthly. Weekly or daily. After hitting these levels, the value of the trading instruments crosses a potential distance. When you see that, you should understand that a unification period can occur.
Significant Political and Economic News
Important news events have a great impact on price movements. Sometimes, the interest rate can be high, the unemployment rate can be increased, and the financial growth of the country can be hindered. These issues can significantly influence the market. For this, a person should be required to keep a financial calendar which includes the date of significant events. If any country is not politically stable, its currency’s value can be decreased, so a change can happen in the Forex market. So, when an investor is going to open a trade, he or she should aware of the big news event. If he or she thinks that news events can interrupt the trade at a particular time, he or she should avoid trading during that time.
In the month of December, the traders spend their break time with their families. Most of them go on a tour to enjoy themselves. In this time, the market becomes slow, and there is a little bit of volatility in the business field. So, if anyone tries to regulate business at this time, he or she becomes depressed because of the low volatility. So, people should not open positions in this holiday period. However, some experts in the Saxo markets often trade during the low market volatility. But for that, you must have a robust plan like the experts. Learn from the experienced UK traders if you really want to trade in low volatility.
Break in the Trending Market Structure
Two trends are seen in the market such as downtrend and uptrend. When the market is on an uptrend, the values are high. On the other hand, if the market is in a downtrend, the values are low. If the value of the currency pair acts differently from these, the investors need to understand that the value can hit the market unification.