Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

Thought about sideways Markets

1 min read

Nifty Futures 30min Charts

How to Interpret the markets when it is totally moving in a sideways direction?

Sideways markets occurs if there is no real interest neither from the buyers nor sellers. Lower trading interest results in lower transaction volume. If the sideways action attracts huge volume possibly it could be due to institutional accumulation/distribution.

First key rule to play during the sideways market is not to get chopped out by the sideways move. Sideways markets are often characterized by slow corrections/trend, consolidations and wider range bound activities.

Most of the sideways movement are often dominated by Short term traders anticipating a breakout whenever it is reaching one side of the consolidation zone.

But when the markets are completely dominated by short term traders (buyers and sellers) what one can face is a broader consolidation zones.

Sideways markets are nothing but repeated breakout failures. More the markets are likely to take a sideways direction more the participants are likely to get frustrated and more likely to give up their trading views about the market.

In Nifty futures Some time back people are talking about triangle patterns and now the triangle almost now becomes an rectangle.

But the real question is when the market is more likely to get rid of consolidation? What could possibly trigger such kind of breakout?

Possibly thats the most bugging question among the traders. One easiest way to spot out the end of the sideways market is looking for clues from the volume where volume starts declining before any major breakout i.e the interest from the participation decreases and results in extreme low followed by the breakout from the consolidation zone.

Recent uptrend in Nifty February contract from 10600 level is followed by ultra low volume which is the result of the frustration. Thats the subtle change one can be able to spot which explains that we are very near to the break from the consolidation zone.

Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

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