are correct about the trade, the profits can be enormous. If EUR/USD rises.3500 and then turns back down hitting.3000, the range trader would harvest a handsome profit, especially if the currency moves authentic work from home jobs in delhi back and forth in its climb.3500 and its fall.3000. The simplest identifiers of trend direction are higher lows in an uptrend and lower highs in a downtrend. However, as we can see from this example a range-bound trader will need to have very deep pockets in order to implement this strategy. Ranging means just mostly going backwards and forwards between similar price levels. In fact, if you applied historical retail spreads and costs of access to the market since 2000, I am certain it would wipe away all the profit. The detailed results are shown in the table below: Currency Pair. If the market ranges most of the time, this Forex trading strategy should produce a fairly steady and positive return. Since the market spends 70 of the time in ranges, this simple range scalping strategy will help you be on the right side of the market and since the markets are fractal in nature you can apply the same principles on any given time frame. You can even think of it this way: the big banks in Forex are option writers and the retail trader has to be an option buyer.
Trending means sustained and continuous price movement in one primary direction. Bottom Line Whether a trader wants to swing for homeruns by trying to catch strong trends with very large leverage or simply hit singles and bunts by trading a range strategy with very small lot sizes, the FX market is extraordinarily well suited for both. However, there is a big problem with trying to implement this range trading strategy: the cost of all the trades. His or her assumption is that eventually the pair will return to that.3000 level again. With US1.6 trillion of average daily turnover, the currency market dwarfs the stock and bond markets in size. Bollinger Band "bands" (see, using Bollinger Band "Bands" to Trade Trend in FX ). The average annual return is about 16 and regarding risk management, the maximum drawdown experienced since the year 2000 is less than five times that number. This flexibility allows range traders plenty of room to run their strategies.