Range-Bound Price Action Favors Range Trading Strategies

Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near quarterly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s quarterly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Strategy – Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest Vol Percentile and Trend indicator figures make Range Trading the more attractive strategy.
-----------

Just the other day I thought of the idea of combining Foresight A.I. with Vantagepoint. I have been experimenting with Vantagepoint since around March 06 when I bought it. What I have been backtesting recently is the idea of using Vantagepoint's Predicted Next Day Highs & Lows and plotting them on Foresight's prediction. The results have been quite promising. Below are two examples....

The first example is from the EUR/USD 12/28/06 Foresight A.I. prediction. Vantagepoint predicted a high of 1.3159 which was already blown out of the water by the beginning of the Foresight forecast which could then recommend to stay out of the EUR/USD for that trading day.

The second example is from the USD/JPY 12/20/06 Foresight A.I. prediction. Vantagepoint predicted a high of 118.56 and a low of 117.56. In this example, the price in the beginning of the Foresight prediction is well below the predicted high of Vantagepoint and well above the predicted low. Foresight is projecting a pretty solid trend for the trading day from the start, signaling a possible buy opportunity since both indictators are in somewhat of an alignment.

Again these are really basic examples with a lot more research and testing to be done. And as I'm sure you all know, Vantagepoint's forecasts are far from perfect but they do give a pretty good general idea of where the market is going and will be the next day. I currently do not own Foresight A.I. and am interested in meeting up with some Foresight users online who currently use the software. Thoughts?

-------------