Flat market is the time of uncertainty when the price of a currency changes but continues to be in a certain range. Predicting the price of the currency during a flat condition is a hard nut to crack as the price moves within a narrow range of 10-60 points. The price cannot cross the maximum limit of 60 points. It reflects a horizontal trend of the price movement. The price is neither increasing nor decreasing too much.The trend of the movement of the price of currency cannot be judged as there is no specific trend of price. The traders are not sure about the direction of the price movement. It is a crucial period in Forex trade. As both the buyers and sellers feel hesitation to trade.
If you like to trade by following the trend, then flat is likely to be the killer of your capital.A long-term flat serves as a signal of an upcoming long-term trend. As the price changes yet remains in a narrow range therefore the future movement of price of a currency cannot be forecast easily. On Flat, there is no significant gain or loss. It is also known as ‘being square’. You just do not see a beneficial and profitable trading opportunity.
Trading on Flat:
You cannot avoid forex trading in flat market period. You need to learn to trade efficiently on flat. First of all you need to have a shorter time frame to trade on flat. Thus scalping does well on flat. But if want to gamble then you would not care about flat and ultimately loss you hard earned money. Stay flat if you are not confident enough to trade.
Some particular indicators serve well on Flat. These indicators include:
- Plus Flat
- Stochastic Oscillator etc.