The most effective way to capitalize on currencies pairs that are trapped in tight ranges is through the use of hedging.
[B]Entry Zone:[/B] Go both long and short at the market if the price is at any level within the 0.6700-0.7025 range
[B]Protective Stop:[/B] Long stop below 0.6500 and short stop above 0.7200
[B]Profit Target:[/B] Long Target at 0.7025 and Short Target at 0.6700
[B]Profit Potential:[/B] 325 pips (excluding transaction costs and slippage)
The EURGBP 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.
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 What Is A Hedge Ratio? - FXCM UK
[B]More Hedging Opportunities[/B]
[B][/B]
[B] [B]More Low Risk Hedging Opportunities[/B]
[B]% ATR Rank[/B]
[B]Stop for Long[/B]
[B]Hedging Zone[/B]
[B]Stop for Short[/B]
[B]Profit[/B][B] Range[/B]
|||||| 0.43%
1.6175
1.6350
1.6600
1.6685
250 pips
||||||||| 0.44%
0.6500
0.6700
0.7025
0.7200
325 pips
|||||||||||| 0.67%
2.3200
2.3500
2.3800
2.4100
300 pips
[B]Medium Risk Hedging Opportunities[/B]
[B]% ATR Rank[/B]
[B]Stop for Long[/B]
[B]Hedging Zone[/B]
[B]Stop for Short[/B]
[B]Profit[/B][B] Range[/B]
|||||||||||| 0.61%
1.3800
1.4000
1.4200
1.4400
200 pips
|||||||||||| 0.78%
92.00
95.00
99.00
101.00
400 pips
||||||||||||| 0.83%
0.9600
1.000
1.0400
1.0800
400 pips
[/B] [B]Entry Zone [/B]-> Go both long and short at the market if [B]the currency is at any level within the Hedging Zone. [/B]
[B]Profit Taking -[/B]>Target for the long order is the [B]top of the entry zone[/B], for the short order is the [B]bottom of the entry zone[/B].
[B]Stop Levels are Key Support and Resistance Points [/B]-> 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.
The lower the Average True Range, the Less Risky the Currency is for Hedging.