19 Mar AUD CHF Range Trade; 20th March 2013
Although I’m still not ready to commit to any new swing positions right now, ones to watch do keep popping up.
Today’s one to watch is based on a simple range set-up in AUD:CHF.
If you’re a range trader you’ll probably be interested in charts like this showing 2 simple support and resistance lines containing the last 6 Months of price movements. The simple strategy is to sell at the top of the range and buy at the bottom. Its probably not a trade I’ll take, in fact I usually find a lot of “gurus” go on about the fortunes they’ve made in such trades after the event but in reality you can never tell when a range is going to break out and after such a long consolidation period a break out could be extremely fierce, and costly if you’re on the wrong side of it!
Trading the range itself probably isn’t my cup of tea but I think its a chart worth watching for pure interest reasons and also to catch it when it does break out (up or down) to get an idea of the strength behind the move. Soon after a breakout you’ll normally see a retest of the range as defined by the example shown on this chart where one would buy (or sell if the break is downwards) the circled area:
For now though, I’ll just watch to see how it progresses and update accordingly if it sparks my interest.