章節 4 Range Trading
Not all clichés in Forex are necessarily true, but the old line that says the Forex market ranges approximately 80% of the time and trends only during the remaining 20% of the time is. For this reason many traders prefer to trade range strategies.
True range traders don't care about direction. The underlying assumption of range trading is that no matter which way the currency travels, it will most likely return back to its point of origin. In fact, range traders bet on the possibility that prices will trade through the same levels many times, and the traders' goal is to harvest those oscillations for profit over and over again. They simply want to sell relatively overbought conditions and buy relatively oversold conditions.
Crosses are best for range
In contrast to the majors and commodity block currencies, both of which offer traders the strongest and longest trending opportunities, currency crosses present the best range-bound trades. The EUR/CHF is one such cross, and it has been known to be perhaps the best range-bound pair to trade.
One strategy for range traders is to determine the parameters of the range for the pair, divide these parameters by a median line and simply buy below the median and sell above it. The parameters of the range is determined by the high and low between which the prices fluctuate over a given period.
Not trade a choppy currency pair
It is best to not trade a choppy currency pair oscillation/range. Therefore, buying and selling cross currencies would be fine. By trading currency crosses, you give yourself more options for trading opportunities because these currencies not twinned to the US dollar can fluctuate by greater extremes. More importantly, one of the pros of trading currencies with lower interest-rate spread is that the yield differential is in favor of the long and stable lower profit.
Not trade in a volatile market
Volatility is a measure of price-change during a specified amount of time. When markets are volatile, this means that prices are changing fast in a short period of time. Volatility is often viewed as a negative in that it represents uncertainty and risk. For example, in a volatile market, your stop losses will get triggered both on the short side and the long side. In a volatile market, you find that your investment currencies are losing value more than they deserve, especially when you choose range trade.
Trading range involves a number of considerations both before and after the trade has been placed. Generally, it is not suggested to trade in the overlapping periods, because the market are experiencing high volatility, especially the overlapping periods in Europe and the United States; It is also not recommended to trade during the release of important data.
