Make Gains Using the Forex trading Grid Technique.The most important part of how to make money using forex trading strategy and hedging will now be covered. In the previous articles of this series, we looked at trading non-stop without worrying about how price moves and where to make money from profitable trades. Now we will show how you make money by buying and selling simultaneously using grid strategy.
No Stop and Hedge Forex Trading Grid System Using the rule that one can complete a trade with profit regardless of the direction the market is moving. The only way it would be logically possible would be if one would have a simultaneous active buy and sell transaction. Most traders would say this is not recommended, but let’s look at this in more detail.
Assume a grid has a grid gap of 100 pips. We will use the simplest form to show the relevant principles. This formation is a 100% pullback formation where the price rises to the grid level and then back to the original grid level. Unfortunately, things get pretty mathematical from here. We also omit broker spreads to simplify things.
Make Gains Using the Forex trading Grid Technique.Let’s say a trader enters the market with a buy (buy 1) and sell (sell 1) trade when the currency is at 1.0100. After that, the price moved to the 1.0200 level. The buy trade will then have a positive value of 100 pips. Sell would be negative 100 pips.
Now we will withdraw our active trade and withdraw our 100 pips. However, the short term stock is currently at a loss of -100 pips. The grid system requires a system to ensure that the trader can take advantage of any movement in the forex market. To do this, one would re-enter buy (buy 2) and sell (sell 2) trades at this level (1.0200 level).
Now, for convenience, let’s assume the price goes back to 1.0100 (the starting point). The second sell (sell 2) has now turned positive 100 pips and the second buy (buy 2) is losing -100 pips. According to grid trading rules, you will withdraw your sale (sell 2) and an additional 100 pips will be added to your account.
This brings the total gain at the moment to 200 pips (buy 1 and sell 2). At this point, the first round of active selling has moved from the 1.0200 level where it was -100 to the 1.0100 level, where it is now breaking even.
transactions added together have now shown amazing gains: – First buy (buy 1) earn 100, second sell (sell 2) collect 100, first sell (sell 1) is now available breakeven and second buy (buy 2)) is -100. This gives a total gain of 100 pips. We can liquidate all trades and drink champagne because we made 100 pips.
Make sure you understand the math behind the operations described above. You may need to reread and draw the moves on a piece of paper to make sure you understand the concept.
This formation is a 100% retracement formation where the price rises to the grid level and then back to the original grid level and leads to a good profit for the trader. There are plenty of other market developments that turn this odd activity of buying and selling at the same time into profit. The next article will cover the formation of 50% pullback that generates the same amount of profit.
There will be many more things about the grid trading system that will not stop being covered in future articles of this directory. Don’t miss them, whatever you do.