How to Profit Using the Forex Trading Grid Technique

How to Profit Using the Forex Trading Grid Technique - How to make money trading non stop? , a Forex trading system that is hedged by enabling buy and sell at each grid trading level. Mathematical calculations are shown from the base formation 100% retracement.

How to Profit Using the Forex Trading Grid Technique

The most important part of how to make money using a non-stop Forex trading strategy, hedging, will now be discussed. In previous articles in this series, we looked at trading non-stop, regardless of which direction the price was moving and where to cash in on profitable deals. We will now show you how you will make money buying and selling simultaneously using a grid strategy.

The grid system of endless currency trading and hedging uses the rule that one should be able to close a trade with a profit no matter which direction the market is moving. The only way this is logically possible is that one will have both buy and sell transactions active simultaneously. Most traders will say that doing this is not recommended but let's look at this in more detail.

Assuming a grid with a grid gap of 100 pips. We will use the simplest formation to demonstrate the principles involved. This formation is a 100% retraction formation where the price rises to the grid level and then returns to the initial grid level. Unfortunately things get very mathematical from here. We also ignore broker spreads to keep things simple.

Let's say a trader enters the market with active buy (buy 1) and sell (sell 1) transactions when the currency is at a level of say 1.0100. The price then rose to the level of 1.0200. Buy will then be positive by 100 pips. Sell ​​will be negative by 100 pips. Now we will cash out our positive deal and keep our 100 pips. Sell ​​now but take a loss of -100 pips. The grid system requires one to ensure that traders can cash in on every move in the Forex market. To do this, one will again enter into buy (buy 2) and sell (sell 2) deals at this level (level 1.0200).

Now, for convenience let's say that the price is moving back to the level of 1.0100 (starting point).

The second sell (sell 2) has now gone positive by 100 pips and the second buy (buy 2) made a loss of -100 pips. According to grid trading rules, you will cash the sale (sell 2) and another 100 pips will be added to your account. That brings the grand total cashed at this point to 200 pips (buy 1 and sell 2). At this stage the first active selling has moved from the 1.0200 level where it was -100 to the 1.0100 level where it is now breaking even.

4 transactions added together now very profitable:- first purchase (buy 1) cashed in +100, second sale (sell 2) cashed in +100, first sale (sell 1) now breaks even and second purchase (buy 2) is -100 . This gives an overall profit of 100 pips in total. We were able to liquidate all the deals and have some champagne because we have made a profit of 100 pips.

Make sure you understand the math behind the activities discussed above. You may have to reread and draw the motion 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 returns back to the initial grid level and generates good profits for forex traders. There are many other market movements that turn this odd Buy and Sell activity into a profit as well. The next article will discuss the 50% retraction formation that produces the same amount of profit.

Successful grid trading strategy:

1. Choose an instrument that can place a forex hedging strategy to work best. Generally choose an instrument that can make money in both bullish and bearish markets, including forex currencies, futures, and cryptocurrencies.

2. Most Forex grid hedging strategies involve opening a large number of orders. Therefore, traders need brokers who charge no commission for opening orders or charge a minimum commission.

3. When placing a pending order, it is necessary to clearly define the position step, as well as the interval for determining the take profit and stop loss.

There will be more about the endless grid trading system and hedging in future articles

That's How to Profit Using the Forex Trading Grid Technique


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