How to avoid 'whiplash' and trade range-bound markets

'Whiplash' describes getting caught out when the market moves one way, then the other, frustrating your trades. But here's a strategy to minimise the chance of this happening.

As a trader, you research a market, decide there is a big move ahead, and pull the trigger. You are then in the lap of the gods.

Sometimes, the market follows your script; sometimes it doesn't, and goes nowhere. It meanders around, driving you crazy in the process, and then your trade gets stopped out.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.