The more inefficient the market, the easier it is to trade. B | The Real Rayner Teo

The more inefficient the market, the easier it is to trade.

But how do you tell when the market is inefficient?

One way is to spot how fast the price reacts to the news.

For the major currencies, the news affects the price instantaneously. You get 1 big spike and that’s it, the price goes back to “normal”.

What about the crypto markets?

You can have Elon Musk tweeting about Dogecoin and it can go up higher for the next 3 hours—that’s an inefficient market (kinda like how you do something wrong and your wife is angry with you for 3 hours.)

So, how is an inefficient market easier to trade?

You get chopped up less often, breakout trades work better, and false break setups are more reliable.

(Unfortunately, an inefficient wife isn’t easier to deal with!)