Trading in such a price environment involves isolating currencies that are trading sideways in ranges (or channels), and then selling at the top of the channel and buying at the bottom of the channel.
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.
When does this system do well and when will it not?
If the market stays in a range, the M-T range trader will have numerous winning trades. In intermediate trending markets, the M-T range trader will fail to adapt and will have large losing trades. Like any range-bound strategy, numerous trades are winners, but winners are generally much smaller than losers.
How are signals generated?
This system is based on the overbought - oversold conditions. When the market comes back from overbought conditions, the system will sell. When the market comes back from oversold conditions, the system will buy. The indicator used is the RSI. The portfolio automatically assesses market conditions every hour.
Is the medium-term range portfolio for me?
The M-T range trader portfolio is for active traders that prefer a high ration of winners to loser and thus prefers to have big losses once in a while than small losses regularly. The M-T range trader follows the market regularly (at least a couple hours per day).
| 8 Model Portfolios to choose from Trend, Range-Bound, Volatility, and Swing Traders! |
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Risk Disclosure: Trading in foreign exchange and futures is speculative and may involve the loss of principal; therefore, funds placed under management should be risk capital funds that if lost will not significantly affect one’s personal financial well being. This is not a solicitation to invest and you should carefully consider your financial situation as to the suitability to your situation prior to making any investment or entering into any transaction.
The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with forex trading. Should you decide to trade any or all of these systems' signals, it is your decision.
No representation is being made that following a system's suggested signals will necessarily lead to profit. Investors may incur into a series of consecutive losses and substantial equity-draw-downs that can deplete their funds before the occurrence of any meaningful profit accumulation. |
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