In forex, a flat market occurs when a currency pair fails to move significantly up or down and does not contribute a significant loss or gain to the forex trading position.
Although flat markets typically move within a tight range, they can still be successfully traded using several different strategies:
- Boundary trading: Boundary, or range, trading involves drawing trend lines across the repeated, shallow highs and lows of the market and trading within the defined channel shown
- No-touch trading: A no-touch trade bets that an asset will not reach a certain price within a given timeframe and can be useful when a trader has identified constraints on the given market
- Scalping: Scalping involves executing trades that expire in a matter of seconds, taking advantage of small movements to accrue multiple wins.
If trading indices, a flat market can be overcome by instead trading single stocks until the index as a whole breaks out of the flat pattern.