Market mavens estimate that most currency pairs move within defined ranges for approximately 80% of the time. When a breakout from such a range occurs, it tends to be sudden and sharp, the sort a trader wants to catch; however, for those who cannot sit and watch the market constantly, these can also be the moves that are easiest to miss, especially if one is asleep when the active London market opens at 8:00 AM GMT or one has misjudged the release of a particularly meaningful fundamental announcement.It’s easy enough to set a market order at a pre-determined entry point and walk away from the computer; however, the value of that technique depends entirely upon the accuracy of one’s estimate of the market’s future direction, which of course in turn depends upon one’s proficiency in technical analysis and predicting a nation’s economic data prior to its release—not the easiest of tasks in recent months, as a well-known bank’s complete miscall of the RBNZ policy statement, released 5 June 2008, illustrates all too well.
Rather than depend upon a market forecast, no matter how carefully prepared, forex hedging traders prefer to hedge their bets and place two entry orders, one above and one below a currency pair’s trading range, and catch the market’s move whichever direction it goes.
Also, ensure that one’s broker offers the feature known as “order cancels order,” meaning that when one order is triggered, the other is automatically nullified. That way, one doesn’t have a loose trade floating about, waiting to be activated when it’s least desired, and often when one is not watching
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