Forex Hedging Strategy Guaranteed Profit
(updated with a 2nd, and a 3rd lower-risk strategy, ringlet down to bottom of the page!)
The forex trading technique below is simply...crawly. If you are able to look at a nautical chart and place when the market is trending, so you can brand a parcel using the below technique. If nosotros had to pick one single trading technique in the world, this would exist the one! Brand certain to use proper position sizing and coin management with this one and you volition encounter cipher but success!
1 - To keep things elementary, permit'south assume there is no spread. Open a position in any direction you like. Case: Buy 0.1 lots at 1.9830. A few seconds after placing your Buy gild, place a Sell Stop order for 0.3 lots at 1.9800. Look at the Lots...
2 - If the TP at 1.9860 is not reached, and the cost goes down and reaches the SL or TP at 1.9770. Then, you take a profit of 30 pips because the Sell Stop had go an active Sell Guild (Short) earlier in the motility at 0.3 lots.
three - But if the TP and SL at 1.9770 are non reached and the cost goes upwardly again, you lot have
to put a Buy Stop order in identify at ane.9830 in apprehension of a rise. At the time the Sell Stop was
reached and became an active order to Sell 0.3 lots (motion picture above), y'all have to immediately
place a Purchase Stop order for 0.6 lots at 1.9830 (picture below).
4 - If the price goes up and hits the SL or TP at 1.9860, then you likewise accept a profit of 30 pips!
5 - If the cost goes down once more without reaching any TP, and so go along anticipating with a Sell Terminate order for one.ii lots, then a Buy Finish order for 2.iv lots, etc... Proceed this sequence until y'all make a profit. Lots: 0.1, 0.3, 0.six, ane.2, two.4, four.8, 9.vi, 19.two and 38.iv.
6 - In this example, I've used a 30/60/thirty configuration (TP 30 pips, SL 60 pips and Hedging Distance of 30 pips). You tin as well endeavor fifteen/thirty/xv, 60/120/60. Also, you can try to maximize profits by testing 30/60/15 or 60/120/30 configurations.
7 - At present, because the spread, choose a pair with a tight spread like EUR/USD. Commonly the spread is just around 2 pips. The tighter the spread, the more likely you will win. I think this may be a "Never Lose Over again Strategy"! Just allow the price motility to anywhere it likes; you'll still make profits anyhow.
Really the whole "secret" to this strategy (if there is any), is to observe a "time menses" when the market place volition move enough to guarantee the pips you need to generate a profit. This strategy works with any trading method. (SEE COMMENTS BELOW))
Asian Breakout using Line-1 and Line-4.
Yous tin can actually use whatsoever pip-range you want.
You just need to know during which time period the market has enough moves to generate the pips you need. Another important matter is to non end up with too many open buy and sell positions every bit you may eventually run out of margin.
COMMENTS: At this signal, I hope that you lot can come across the incredible possibilities that this strategy provides. To sum things upwardly, you enter a trade in the management of the prevailing intraday trend. I would advise using the H4 and H1 charts to determine in which direction the market place is going. Furthermore, I would suggest using the M15 or M30 as your trading and timing window. In doing this you will usually hit your initial TP target 90% of the time and your hedge position will never need to be activated. As mentioned in point 7 above, keeping spreads depression is a must when using hedging strategies. But, also, learning how to take advantage of momentum and volatility is even
more important. To accomplish this, I would propose looking at some of the most volatile currency pairs such equally the GBP/JPY, EUR/JPY, AUD/JPY, GBP/CHF, EUR/CHF, GBP/USD, etc. These pairs will give up 30 to xl pips in a heartbeat. And so, the lower the spread you pay for these pairs, the better. I would propose looking for a forex broker with the lowest spreads on these pairs and that allows hedging (buying and selling a currency pair at the same fourth dimension).
As you lot can meet from the picture above, trading Line 1 and Line ii (10 pip toll difference) will also result in a winning merchandise.
This method is extremely uncomplicated:
1. Just choose 2 cost levels (High, Low, you decide) and a specific time (y'all decide), if you have a High breakout so purchase, if you have a Low breakout then sell. TP=SL= (H-L).
2. Every fourth dimension y'all experience a loss, increase the buy/sell lots in this numerical sequence: 1, iii, 6, 12, etc... If yous choose your fourth dimension and cost range well, you will not demand to actuate this many trades. In fact, you will very rarely need to open more than ane or 2 positions if you lot properly time the market.
iii. Learning to accept advantage of both volatility and momentum is key in learning to utilise this strategy. As I mentioned earlier, timing and the time flow tin can be crucial for your success. Even though this strategy tin can exist traded during any market place session or fourth dimension of day, it needs to be emphasised that when you exercise merchandise during off-hours or during lower volatility sessions, such as the Asian session, it volition take longer to achieve your profit objective. Thus, it's always best to trade during the overlapping hours of the European/London sessions and/or the New York session. In improver, y'all should keep in mind that the strongest momentum commonly occurs during the opening of any market session. Therefore, it's during these specific times that you will trade with a much higher probability of success. TIMING + MOMENTUM = SUCCESS!
March 29, 2007 was a typical example of a dangerous day because the markets did not motility much. The all-time way to overcome such a situation is to exist able to recognize current market weather and know when to stay out of them. Ranging, consolidating, and minor oscillation markets will kill anyone if not recognized and traded properly (you lot should, in fact, avoid them like the plague!). However, having a expert trading method to assistance you identify good setups volition help you lot eliminate the need for multiple trade entries. In a fashion, this strategy will get a sort of insurance policy guaranteeing you a steady stream of profits.
If you learn to enter the markets at the correct time (I sometimes wait for toll to pullback or throwback a bit earlier jumping in), y'all volition find that you will ordinarily hitting your initial TP target ninety% of the time and toll will not get anywhere shut to your hedge order or your initial stop loss. In this example, the hedging strategy replaces the need for a normal stop loss and acts more equally a guarantee of profits.
The in a higher place examples are illustrated using mini-lots; however, every bit you go more comfortable and proficient with this strategy, you will gradually work your manner up to trading standard lots. The consistency with which you will be making 30 pips any time yous want volition lead to the confidence necessary to merchandise multiple standard lots. Once yous get to this level of proficiency, you profit potential is unlimited. Whether you realize it or not, this strategy volition enable you to trade with virtually no adventure. It's like having an ATM Debit Card to the World Banking concern!!!!!
A variation of the strategy using a double martingale
This strategy is a bit different but is quite interesting as you lot still turn a profit when you lot hit a end loss! Using the below motion picture as an example, you would purchase 1 lot (indicated with B1) with the idea that it will rising. But you will too sell 1 lot (at S1, which is the same price as your buy price) at the same time, in instance the toll goes down. So follow the diagram. When a martingale stops, the other one takes over. This strategy can earn pips during periods where price is ranging. Equally your winning transactions just crave an boosted lot to exist put into play, it doesn't really make much of a difference in relation to the other martingale. In that location is always a adventure for the first martingale during ranging periods (flat consolidation periods), only this risk is mitigated by the pips you lot are earning from the 2d martingale!
In the to a higher place example, on the EUR/USD, you buy one microlot and sell one microlot at the aforementioned time, then, if the pair goes down 10 pips, you place an order to sell 3 microlots and buy i microlot. If the pair falls x pips, you lot've "won" and can start all over over again. If the pair rises, yet, then you will place a new buy order at half-dozen microlots and a sell order for 1 microlot, etc. The lot increments are: 1 microlot, three microlots, 6 microlots, 12 microlots, 24 microlots, etc., each time the price reverses direction confronting your heaviest weighted direction. And once you've "won", yous start all over again (only avert ranging markets, this technique is keen for markets that display a genuine direction)!
A lower-take chances martingale strategy (my favorite of the 3 strategies on this page!)
Here's what you do: if price is trending up, place a buy guild for .ane lots (also place a Cease Loss at 29 pips and a Have Profit at 30 pips). At the same time place a Sell Stop order for .2 lots 30 pips beneath with a 29 pip SL and 30 pip TP. If the outset position hits SL and second order is triggered, place a Purchase Stop club 30 pips above your new order for .4 lots. Etc... Your guild sizes will be .one/.two/.4/.8/i.6/etc...
If ever your cease loss is hit and the new lodge has not been triggered considering price has reversed, identify a new order back at the price point you but departed from, where toll is now headed towards and where your previous lodge was placed (nonetheless, instead of a sell stop order, you will have a sell limit order, OR, instead of a purchase stop order, you will take a purchase limit lodge). Example: At $one.1050 you place a .ane lot buy order, but price reverses down to $1.1021 triggering the stop loss simply not dropping far enough to trigger the .2 lot sell cease order at $1.1020. Y'all would then place a .2 buy stop position above the electric current price at $one.1050 (with the usual 29-pip stop loss and 30-pip accept turn a profit orders). So now you have two unlike .2 lot positions in identify (the original one at $1.1020 and the new one at $i.1050). Every bit before long every bit one guild is triggered, delete the other i and proceed setting up your next pending position.
I recommend that if you have a $10,000 (or €) account, your first position be .1 lots. If you take a $20,000 account, I would recommend trading two different pairs (ex: if y'all go long on EURUSD, also become long on USDJPY, that manner you're sure to run into half of your open positions hitting a take profit, and this will therefore dissever your overall risk in half). I would go and so far as to trade 3 different pairs if you're trading a $thirty,000 business relationship, and only increment the weight of your first positions as you accept more capital to trade with.
I like this strategy because your overall position sizes (and therefore risk) end up being lower:
Original sure-fire strategy position sizes: .1, .3, .6, 1.2, etc.
This strategy'south position sizes: .1, .two, .4, .8, etc.
Source: http://www.forex-central.net/sure-fire-forex-hedging-strategy.php
Posted by: evanshimeaugh.blogspot.com
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