‫In this one we're going to take a look at flat market strategy.
‫So what's the difference between choppy and flat.
‫Well choppy is back and forth where you see peaks and valleys.
‫But when you get a flat market.
‫There are no peaks and valleys.
‫Not really.
‫And that is what we're looking at in a couple of different areas in this chart.
‫Flat markets are the worst.
‫Quite frankly, they don't give you much to work with.
‫You can see like this is a 15 minute chart.
‫And yes, it's zoomed out, but you can see we didn't do anything most of that day.
‫We didn't do anything most of this day.
‫And quite frankly.
‫There isn't much to do with the flat market.
‫Each one of these 15 minute candles tell you that the market just has no desire to go anywhere.
‫So the best strategy for dealing with a flat market is.
‫Letting it tell you where it wants to go.
‫Ultimately, a flat market typically is nothing more than consolidation.
‫It just a market that has no.
‫Real catalyst to do anything, and you'll see that a lot.
‫When there is no earnings or anything anywhere near.
‫This is a flat market here.
‫Now this I would consider a choppy market.
‫We're in a range.
‫While this technically is a range, we're talking about a range of $0.25.
‫We're not talking about a whole lot of trading.
‫Now you can zoom in and go back and forth and treat it as a choppy market on the one minute chart,
‫if you wish.
‫But in a world where there's over 5000 stocks to most of you available to trade, if stocks and ETFs
‫and everything else, there's no point in doing that.
‫You don't need to punish yourself like that.
‫So keep that in mind.
‫But when you do get these flat.
‫Areas in these stocks that just really haven't gone anywhere.
‫The next thing you're looking for.
‫In some type of volume spike.
‫So for example, here we did nothing.
‫For 24 hours basically.
‫Well, for a trading day, we rallied a little bit and just went sideways.
‫You can see we got this huge, massive spike higher.
‫$2 spike on this 15 minute candle.
‫So here's the thing.
‫Do you have any doubts as to where this market's trying to go?
‫You can put your stop loss on the other side of that flattened area, because you know that there are
‫a ton of orders right here that would have to be taken out for you to be hurt.
‫You may have to be patient.
‫You may have to deal with a pullback.
‫In this case you really didn't.
‫But a pullback is not that uncommon.
‫And just recognize it's part of the market structure you typically see.
‫So you do have the option of waiting for a pullback to buy.
‫But typically when you get an explosive candle like this after a market has done nothing, the pullbacks
‫are very brief.
‫In very shallow.
‫And you can see that with your stop here at say 2930.
‫And even if you bought here at 32, you're looking at about two and a half dollars.
‫You made five before the market flattened or got in a choppy range.
‫So that was a 2 to 1 risk to reward ratio kind of built into this trade.
‫You'll see this time and time again.
‫You know, here is a massive sell off.
‫Now, I'm the first to admit that this would be difficult to start shorting down here after that move,
‫but you can see that certainly it worked out.
‫Same here in John Deere.
‫You could call this choppy if you want.
‫I call it flat because there aren't you know, this is more choppy because it's a little wider and there
‫is a little bit of art to this.
‫There is no hey, this is a flat market because it's X amount of percentage move.
‫It's more a visual thing.
‫It's when you look at a market and you go, you know, there just isn't enough there back and forth
‫for me to be bothered with.
‫And then you get a volume spike like that, a massive candlestick that tells you right there that the
‫market's ready to go.
‫And that's really the only way to handle these markets that I've found that's even remotely reliable.
‫Beyond that.
‫What you really want to see and in this case endear.
‫It was obvious we had been bullish for quite some time.
‫So it shows you that there's more conviction coming.
‫We like continuation in these setups.