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- Friday, 16 October 2009 21:47:18 GMT Market Volatility Consolidates following Disappointing Earnings (Forex Video)
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- Friday, 16 October 2009 16:02:03 GMT Will A Pullback In Equities Sink The Euro?
- Friday, 16 October 2009 05:27:00 GMT Euro Down Ahead of Trade Data, Markets to Gauge Currency Impact on Exports (Euro Open)
- Friday, 16 October 2009 08:38:27 GMT Tech Talk 10.16.2009
- Thursday, 15 October 2009 22:59:48 GMT The Dollar and Dow See Little Follow Through, Yet Currencies Produce Extreme Volatility (Forex Video)
- Thursday, 15 October 2009 15:41:32 GMT GBP/USD Advance Slows at Staunch Resistance Creating Scalping Opportunity
- Thursday, 15 October 2009 14:30:15 GMT British Pound Forecast to Rally further on Forex Sentiment
- Thursday, 15 October 2009 06:51:38 GMT New Zealand Dollar Gains as Inflation Outperforms But Rate Hikes Look Suspect (Euro Open)
- Wednesday, 14 October 2009 18:24:03 GMT US Dollar Initially Drops on Indications the Fed Could Expand MBS Purchases
- Wednesday, 14 October 2009 22:24:51 GMT Dollar Follows the Dow's Push Above 10,000 Instead of Strong Retail Sales (Forex Video)
- Wednesday, 14 October 2009 05:36:26 GMT US Dollar Drops to New Low as Chinese Export Figures Boost Risk Appetite (Euro Open)
- Tuesday, 13 October 2009 21:55:42 GMT Dollar, Markets Maintain Their Sentiment-Based Momentum Despite Data (Forex Video)
- Tuesday, 13 October 2009 16:50:57 GMT Defined Trading Levels Makes USD/JPY Attractive For Scalpers
- Tuesday, 13 October 2009 04:22:35 GMT US Dollar Holds Up Despite Asian Stock Gains, UK CPI and German ZEW on Tap (Euro Open)
- Tuesday, 13 October 2009 05:28:14 GMT Risk Aversion and Geopolitical Tensions Creep In (Opening Comment)
- Tuesday, 13 October 2009 02:27:39 GMT Declining U.K. Consumer Prices Would Validate Bearish Pound Technical Outlook
- Monday, 12 October 2009 21:51:52 GMT Traders Leaning on the Dollar as its Dominance Continues to Falter (Forex Video)
- Monday, 12 October 2009 14:50:59 GMT Forex Strategy Outlook: US Dollar Range Likely to Hold on Low Volatility
For Currency Pairs that are trading sideways, HEDGING is the best strategy to implement. This involves putting a buy and sell order in the same currency pair at the same time – in one account. Every day, we rank the major currency pairs by suitability for hedging.
Rules for Following the Hedging Radar
1) Entry Zone -> Go both long and short at the market if the currency is at any level within the Hedging Zone.
2) Profit Taking ->Target for the long order is the top of the entry zone, for the short order is the bottom of the entry zone.
3) Stop Levels are Key Support and Resistance Points -> Place the actual stops a few pips above the higher level and a few pips below the lower level. The break of these levels signals that the ranges have been broken and the hedging strategy should no longer be implemented.
4) The lower the Average True Range, the Less Risky the Currency is for Hedging.
|
Low Risk Hedging Opportunities - Currencies that are
Ranging | ||||||
|
Currency |
% ATR
Rank |
Stop for
Long |
Hedging
Zone |
Stop for
Short |
| |
|
EURCHF |
||||||
0.34% |
1.6245 |
1.6350 |
1.6450 |
1.6555 |
100
pips |
|
EURGBP |
|||||||||
0.46% |
0.6775 |
0.6795 |
0.6820 |
0.6875 |
25
pips |
|
EURUSD |
||||||||||||
0.59% |
1.3295 |
1.3400 |
1.3500 |
1.3675 |
100
pips |
|
USDCAD |
|||||||||||
0.60% |
1.1095 |
1.1300 |
1.1400 |
1.1475 |
100
pips |
|
GBPCHF |
||||||||||||
0.60% |
2.3895 |
2.4000 |
2.4100 |
2.4205 |
100
pips |
|
|
|
|
|
|
|
|
|
Medium Risk Hedging Opportunities - Currencies
that are Volatile | ||||||
|
Currency |
% ATR
Rank |
Stop for
Long |
Hedging
Zone |
Stop for
Short |
| |
|
EURAUD |
||||||||||||
0.65% |
1.6240 |
1.6286 |
1.6367 |
1.6430 |
81
pips |
|
GBPUSD |
|||||||||||||
0.67% |
1.9675 |
1.9726 |
1.9822 |
1.9914 |
96
pips |
|
AUDUSD |
|||||||||||||
0.70% |
0.7945 |
0.7979 |
0.8180 |
0.8351 |
201
pips |
|
CHFJPY |
|||||||||||||
0.71% |
96.86 |
97.45 |
97.89 |
98.05 |
44
pips |
|
EURJPY |
||||||||||||||
0.75% |
158.95 |
159.61 |
160.85 |
161.05 |
124
pips |
|
|
|
|
|
|
|
|
|
High Risk Hedging Opportunities - Currencies
that are Trending | ||||||
|
Currency |
% ATR
Rank |
Stop for
Long |
Hedging
Zone |
Stop for
Short |
| |
|
USDJPY |
|||||||||||||||
0.77% |
118.40 |
118.75 |
119.52 |
120.05 |
77
pips |
|
GBPJPY |
|||||||||||||||||
0.88% |
232.09 |
235.10 |
236.27 |
238.15 |
117
pips |
|
AUDJPY |
||||||||||||||||||
0.91% |
95.76 |
95.91 |
97.00 |
97.50 |
109
pips |
|
NZDUSD |
|||||||||||||||||||
0.97% |
0.7096 |
0.7120 |
0.7250 |
0.7463 |
130
pips |
|
NZDJPY |
|||||||||||||||||||||
1.22% |
84.65 |
85.15 |
85.57 |
85.79 |
42
pips |
|
USDCHF |
|||||||||||||||||||||
2.02% |
1.2070 |
1.2122 |
1.2165 |
1.2205 |
43
pips |
**How is the % ATR Rank Calculated?
The average true range is the 90 days moving average of the currency’s true range. The true range is the greatest of: the difference between the current high and the current low; the difference between the current high and the previous close or the difference between the current low and the previous close.
The %ATR is the relative value of the ATR when weighted against the
price. For example, if the
ATR for the EURGBP is 26 pips then the %ATR is 0.4 percent since 0.0026/0.6602 =
0.4% where 0.6602 is the quoted price of
the EURGBP.
Hedging Strategy of the Week
- Entry
Zone: Go both long and short at the market if the price is at any level within
the 0.6795-0.6820 range
- Protective Stop: Long stop below 0.6775 and short
stop above 0.6875
- Profit Target: Long Target at 0.6820 and Short Target at
0.6795
- Profit Potential: 25 pips (excluding transaction costs and
slippage)
The EUR/GBP is our primary target for hedging in the week ahead, with clear
range-bound trade and concrete support and resistance levels. To hedge, go both
long and short at the market if price stays within the above Hedging Zone. Take
profits at R1 for longs and at S1 for shorts, covering losses above R2 or below
S2. 
Want More Information on Hedging?
The
most effective way to capitalize on currencies pairs that trapped in tight
ranges is through the use of hedging. The hedging feature is currently available
on all accounts using FXCM’s No Dealing Desk service. For more information
on FXCM hedging strategies please visit http://www.fxcm.com/hedging.jsp
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