How to calculate range
Image above is one example of the current view current price on one of the largest service provider of Online Forex Trading.
Description:
Currency: Is the column a variety of currencies traded
Last: Is the price moves at the moment
Bid: Is the price on offer by the broker if we
To close / liquidate our position
Offer: It is the price offered by brokers if we
About to open a new position.
High: It is the record highs of the day until the second
Current time.
Low: The lowest price is a record of all that day until the second
Current time
Open: It is the record on the opening price that day.
How to calculate the average daily range of a currency:
Collect price data High and Low desired currency for at least a month ago in the last 22 working days
Example:
At today's price is Euro High Low price is 1.1839 and 1.1766
Means the range today is 1.1839 - 1.1766 = 0.0077 or mean 77 points
Do things like the above to the data for at least a month ago that there is total points count for one month from the data that we make the following totals and then meet in the divide by 22 (22 is the number of working days during the one month period)
EURO - USD 115 POINT
GBP - USD 150 POINT
USD - JPY 90 POINT
USD - CHF 130 POINT
The above description is the result of calculation that has been established based on the observation that we have done in accordance with the manner described above.
Note:
The average number is not absolutely certain that one day it will move in range. Please note again that the market is very flexsibel and unpredictable. One day it could have its price range can jump up two or three times more than usual.
But such incidents are rare.
Calculating the target profit
Observations on case study examples of cases today is based on the data in Figure 1
EUR-USD = 73 points less than the average 42-2x
GBP-USD = 107 points less than the average 43-2x
USD-JPY = 51 points less than the average 39-2x
USD-CHF = 77 points less than the average 53-2x
Position:
Eur-Usd = Last: 1.1819 High: 1.1839 Low: 1.1766
Description: break high 20 points again
Gbp-Usd = Last: 1.7551High: 1.7568 Low: 1.7461
Description: break high 17 points again
USD-JPY = Last: 120.56 High: 120.78 Low: 120.27
Description: break high 22 points again
Usd-Chf Last: 1.3030 High: 1.3072 Low: 1.2995
Description 35-point break low again
Learning the position of four pairs above the one that is already fairly mature GBP currency is more or less 17 point break high daily range position was 107 points less than 43 points again and had entered the average range-2x
Relationship with the other pair is:
Against the EUR-USD
43 point average deficiencies 2x GBP-USD less distance prices for EURO-USD to break high ie 43-20 = 23.
So add 23 points to the high price of 23 EURO-USD 1.1862 +1.1839 = 1.1862 is less than 115 points (average daily range of EURO-USD), ie = 1.1747 from this calculation we get a picture about 2x the high price it today lownya 1.1747 1.1862 whereas if the right price then we are approaching a position of open positions 1.1862 sell any such unfortunate one tomorrow at least 90% must be returned capital.
Against GBP-USD own
Low price point = 1.7461 +150 +150 points
Estimated high price: 1.7611
Estimated price low: 1.7461
Against the USD-JPY
43 point-22poin = 21 add 21 points to the high price of JPY 120.78 = 120.99
120.99-90 = 120.09 points
Estimated high of USD-JPY = 120.99
Estimated low of USD-JPY 120.09
Against the USD-CHF
43 points - 35 points = 8point subtract 8 points from the low price-8point = 1.2987 1.2995
Estimated high price = 1.3117
Estimated low price = 1.2987
Note:
Based on current trends will tend to chase price is usually the most close-reaching example of a case such as the EURO-USD:
Position:
Eur-Usd = Last: High 1.1819: 1.1839 Low: 1.1766
Description: 20 High Range break point again today is already 73 points Range 115-point average is simply to say that the Euro will continue to break high up into the position of the average range is 115 to position tick poinan if current position is 1.1819 then open position is open at the recommended buy price considerations will probably continue to break high reached to the position of 1.1881. From where is the number 1.1881? Figures obtained from the assumption 1.1881 low price today is +115 points = 1.1881 1.1766. In theory means we still have a chance to gain advantage 1.1881-1.1819 = 62 points again, but in practice sometimes the price can be higher or it could be even lower than our forecasts for safety then 62 points are on for two more (62:2 = 31 ) 31 points is what we hoped would be a profit but if even this is still considered less secure it at the discount becomes 25-point we go again
With 25 points as profit target us, means we've set a target of rational (not greedy) with the above calculation we can make sure 75% would already be won
Calculate stop loss:
In reality, not all calculations we always run smoothly mistakes can happen and it is already a risk that can not be avoided anymore.
To limit losses greater use stop loss facility. No special calculations for calculating this stop loss is all up to you how much you are willing to bear the defeat.
Personally I put a stop loss 50 points (if my calculations are wrong, so I have minus the result automatically if the minus 50 points I've reached my position will be liquidated automatically and I bear the loss of 50 points)
Calculating the capital to be used for trading:
Suppose you have $ 100 as capital. Use 10% of it just for trading the rest is used as a reserve to face the swing prices or to lock the position of defeat (Hedging) while slowly surreptitiously action point to recover our loss.