when not to trade
When the market is moving sideways, there’s no clear indication of its future direction. Professional traders understand the importance of patience in such situations, waiting for a strong signal before deciding on a trade.
A practical approach to identifying trade opportunities involves using two simple moving average (SMA) lines along with two red channel lines. This setup provides clear guidance on when to enter or avoid trades. The accompanying diagram illustrates this concept simply.
Here are the two essential rules to follow:
Avoid trading when the moving average lines remain within the red channel lines.
Trade only when the two moving average lines cross beyond the red channel lines.
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