EUR/USD - The Best Pair to Apply a Hedging Strategy This Week

§         Entry Zone: Go both long and short at the market if the price is at any level within the 1.3300-1.3385 range<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

§         Protective Stop: Long stop some pips below 1.3245 and short Stop slightly above 1.3415

§         Profit Target: Long Target at 1.3385 and Short Target at 1.3300

§         Profit Potential: 85 pips (excluding transaction costs and slippage)

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.  <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

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 <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />AverageTrueRange, the Less Risky the Currency is for Hedging.