by Filipe R Costa
A study manufactured by FXCM shows that its investors are having difficulty to be successful investing the Forex market. According to Rodriguez and Shea, authors of the study, this is because of the fact that traders are placing their trades at the wrong time interval.
Most Currency exchange investors use range trading systems. They open long positions in a market when technical indicators show it is in an oversold state, and open short positions (or close existing long positions) when these indicators point to overbought conditions. These methods rely on SR levels that have a tendency to be more difficult to break when there is less volatility in the market. At times of high volatility, these levels are more simply broke making range traders lose money.
Foreign exchange pairs involving European and/or Northern US currencies like the EUR/$, GBP/Bucks, and Bucks/CHF are rather more actively traded in the Western european and the US sessions. Commercial data having an effect on those pairs is mostly reported during those sessions and the most important FX traders, including banks, trade during that time. This indicates that volatility will be higher.
According to the study, volatility for non-Asian currency pairs, as the EUR/Greenbacks, GBP/Greenbacks and Greenbacks/CHF is reduced between 7pm and 11am, and range trading secrets will perform very well inside that bracket. By other side, and against what many could be thinking, Asian currency pairs are not a good target for range trading. During the Asian session, volatility is high, as expected; during the Western european and the US sessions, volatility can be still high, at least for the main currency pairs.
Spread gambling investors have some lessons to benefit from FXCM's study. All trading methods need precise conditions to work and we shouldn't try and fit them outside their world. Range trading is a method that attempts to explore oversold and overbought markets, relying much on support and resistance levels. Volatility should be comparatively stable for these to work. On occasions in which info is steadily flowing, it is really unlikely a market will stay within a tight range. If you like to range trade, then have your coffee to hand and get ready for a long night of work.
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New Unique Article!
Title: FX Range Traders Are Losing Cash
Author: Filipe R Costa
Email: dirasu.880217.0@articlesamurai.com
Keywords: spread betting companies,spread betting,financial spread betting,forex trading,forex
Word Count: 375
Category: forex
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