Nothing can test a trader’s patience quite like a choppy market.
When markets are rallying or fading there is action, momentum, and what often feels like a lot of opportunity for profitable trades. Where a trader’s patience and fortitude can be tested is when the market finds itself trapped in a tight range for days on end.
This is what we’ve seen in the market this week.
To sit and stare at the charts during a chop fest is an exercise in frustration and one that is likely to rob you of your peace of mind. So what’s our suggestion for handling emotions when the markets are stuck?
Set alerts and walk away!
Chart alerts can be one of your best friends as they can keep an eye on the market for you. When things are range-bound, we like to set alerts at key points both above and below the current price and simply walk away… letting the alerts work.
The beauty in this is that if the market happens to make a meaningful move, you will be alerted. If instead the chop fest continues and nothing of substance happens, your alerts will not get triggered and you will know that nothing meaningful is taking place while you’re away from the charts.
For example, look at the Nasdaq (NQ) chart this week (shown below). We had alerts at levels above and below its recent range and none of those alerts were triggered. Instead of watching every minute of price action and pulling out our hair, we let the alerts work and were able to detach ourselves from the chart knowing nothing was “changing.”
Letting the choppiness of the market steal your peace of mind can lead to unwarranted exits, overtrading, and unnecessary anxiety. Let the alerts do the work for you and don’t be a victim of the chop. More often than not, the chop is just “algorithm-driven” noise designed to shake you out of good-looking positions.
In this Sunday’s video, we’ll cover a few of our favorite setups that should be poised to make solid moves once the chop fest ends. We’ll talk to you on Sunday!
Stay Focused!