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Is "Range Trader" Forex Software For You?
"Range trading" foreign exchange means identifying a trading range by observing price action for a period of time, and then buying when the currency is near the low end of the range and selling as it approaches the high end. To make this profitable, you have to know when a tradable range exists because the currency is fluctuating rather than trending up or down. You also have to place a tight stop loss just under the low end of the range to protect yourself if you buy in just before a new downtrend is about to begin. Finally, you have to resign yourself to missing the big uptrends, as you will be selling near the top of the range and out of the currency if and when it breaks out. Range trading is a lower-risk, lower-return way to approach forex, so I wouldn't say it is “better” or “worse” than more aggressive stratgies like Forex Killer. Whether it is better or worse for you depends mostly on your risk-taking profile. If you are a beginning forex trader, it can be a very good idea to start with a less-risky strategy like range trading, and then move on to more aggressive trend-following or momentum strategies. Range trading aims to "scalp" many small moves back and forth in a currency, and a good software program will give you 90% winning trades or more. Because each win is small, it is very important to be sure the software keeps the 10% losing trades small, also. That means getting out quickly using properly-set stop losses. The Range Trader software aims to produce 5% to 10% returns per month, which is not trivial, with a much lower risk of a major drawdown or catastrophic wipeout than trend-following software. If you are just getting started with a small amount of capital, I'd suggest you start with Range Trader and then move on to Forex Killer. (Of course, if you can’t watch the markets full-time, Forex Auto Pilot is the way to go.) Another very good strategy is to split your account and run part of it using Range Trader, to grind out profits during sideways markets, and part using Forex Killer, to capture the big moves during trending markets. Range Trader from Peter Parsons is a pretty easy to follow system, certainly easier than Forex Killer. It focuses on the Eurodollar/U.S. dollar market, one of my favorites due to the high liquidity and large amount of media coverage and news that creates tradable price moves. As expected, Range Trader produces many small trades with more than 95% winners. The new Phase Two version has improved both the usability and profitability of the software. One negative is that Range Trader comes from a small company, and while Peter is very helpful, it can take 36 hours to hear from customer service. Range Trader offers an eight week (56 days) guarantee, and you should be up and running in a day. I would paper trade for a day or two just to get the feel of it, but you probably don’t need a whole week of paper trading because the software turns out so many small signals to scalp profits within a range. You'll have a good feel for it after a day or two, and can start feeding real money into your account. One of the keys to forex trading success is money management. You never want to expose all your capital to a devastating bad trade. A "very rare" event does not mean never, as we all learned when Russia defaulted on its debt in the late 1990s and the Long Term Capital Management hedge fund went under, nearly taking the U.S. financial system with it. The best way to learn money management is to start slowly, adding more money to your account as your confidence and knowledge increase. Because it makes so many trades, that confidence-building process can go pretty quickly with Range Trader. Highly recommended. |
Forex Auto Pilot
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Range Trader
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