Danger --> NEVER trade in a ranging market
5 min Nasdaq 100 CandleStick Chart
If you trade on Friday, good luck to you. This is exactly the time when you should stay on the sidelines. Let me explain why. Firstly, price is moving within a narrow range, from 1460 to 1468. Obviously one strategy would be to buy whenever it hits the lower resistance level of 1460, but let me ask you another question. Is the risk/ reward ratio good enough for you to do that? If you look at the short term MACD, it is hovering close to the zero line, suggesting that the moving averages are close to one another. The mid term MACD has a gentle slope upwards which is typical of a ranging market. Normally we need a symmetrical slope on hte upside for a reasonable amount of trend.