Theforex trading technique below is simply...awesome. If you are able tolook at a chart and identifywhen the market is trending, then you canmake a bundle using the below technique. If I had to pickone singletrading technique in the world, this would be the one! Make sure touse proper positionsizing and money management with this one and youwill encounter nothing but success.
1- To keep things simple, let's assume there is no spread. Open aposition in any direction you like.
Example:Buy 0.1 lots at 1.9830. A few seconds after placing your Buy order,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 price goes down andreaches the SL or TP at 1.9770.
Then,you have a profit of 30 pips because the Sell Stop had become anactive Sell Order (Short) earlier in the move at 0.3 lots.
3- But if the TP and SL at 1.9770 are not reached and the price goesup again, you have to put a Buy Stop order in place at 1.9830 inanticipation of a rise. At the time the Sell Stop was reached andbecame an active order to Sell 0.3 lots (picture above), you have toimmediately place a Buy Stop order for 0.6 lots at 1.9830 (picturebelow).
4- If the price goes up and hits the SL or TP at 1.9860, then you alsohave a profit of 30 pips!
5- If the price goes down again without reaching any TP, then continueanticipating with a Sell Stoporderfor 1.2 lots, then a Buy Stop order for 2.4 lots, etc... Continuethis sequence until you make aprofit.Lots: 0.1, 0.3, 0.6, 1.2, 2.4, 4.8, 9.6, 19.2 and 38.4.
6- In this example, I've used a 30/60/30 configuration (TP 30 pips, SL60 pips and Hedging Distance
of30 pips). You can also try 15/30/15, 60/120/60. Also, you can try tomaximize profits by testing
30/60/15or 60/120/30 configurations.
7- Now, considering the spread, choose a pair with a tight spread likeEUR/USD. Usually the spread is only around 2 pips. The tighter thespread, the more likely you will win. I think this may be a "NeverLose Again Strategy"! Just let the price move to anywhere itlikes; you'll still make profits anyway.Actually the whole "secret"to this strategy (if there is any), is to find a "time period"when the market will move enough to guarantee the pips you need togenerate a profit. This strategy works with any trading method.
AsianBreakout using Line-1 and Line-4.You can actually use any pip-rangeyou want.
Youjust need to know during which time period the market has enoughmoves to generate the pips you need. Another important thing is tonot end up with too many open buy and sell positions as you may eventually run out of margin.
COMMENTS:At this point, I hope that you can see the incredible possibilitiesthat this strategy provides. To sum things up, you enter a trade inthe direction of the prevailing intraday trend. I would suggestusing the H4 and H1 charts to determine in which direction the marketis going. Furthermore, I would suggest using the M15 or M30 as yourtrading and timing window. In doing this you will usually hit yourinitial TP target 90% of the time and your hedge position will neverneed to be activated. As mentioned in point 7 above, keeping spreadslow is a must when using hedging strategies. But, also, learning howto take advantage of momentum and volatility is evenmore important.To achieve this, I would suggest looking at some of the most volatilecurrency pairs such as the GBP/JPY, EUR/JPY, AUD/JPY, GBP/CHF,EUR/CHF, GBP/USD, etc. These pairs will give up 30 to 40 pips in aheartbeat. So, the lower the spread you pay for these pairs, thebetter.
Asyou can see from the picture above, trading Line 1 and Line 2 (10 pipprice difference) will also result in a winning trade. This methodis extremely simple:
1.Just choose 2 price levels (High, Low, you decide) and a specifictime (you decide), if you have a High breakout then buy, if you havea Low breakout then sell. TP=SL= (H-L).
2.Every time you experience a loss, increase the buy/sell lots in thisnumerical sequence: 1, 3, 6, 12, etc... If you choose your time andprice range well, you will not need to activate this many trades. In fact, you will very rarely need to open more than one or twopositions if you properly time the market.
3.Learning to take advantage of both volatility and momentum is key inlearning to use this strategy.
AsI mentioned earlier, timing and the time period can be crucial foryour success. Even though this strategy can be traded during anymarket session or time of day, it needs to be emphasised that when you do trade during off-hours or during lower volatility sessions,such as the Asian session, it will take longer to achieve your profitobjective. Thus, it's always best to trade during the overlappinghours of the European/London sessions and/or the New York session.In addition, you should keep in mind that the strongest momentumusually occurs during the opening of any market session. Therefore,it's during these specific times that you will trade with a muchhigher probability of success. TIMING + MOMENTUM = SUCCESS!
March29, 2007 was a typical example of a dangerous day because the marketsdid not move much.
Thebest way to overcome such a situation is to be able to recognizecurrent market conditions and know when to stay out of them.Ranging, consolidating, and small oscillation markets will killanyone if not recognized and traded properly (you should, in fact,avoid them like the plague!). However, having a good trading methodto help you identify good setups will help you eliminate the need for multiple trade entries. In a way, this strategy will become a sortof insurance policy guaranteeing you a steady stream of profits.Ifyou learn to enter the markets at the right time (I sometimes waitfor price to pullback or throwback a bit before jumping in), you willfind that you will usually hit your initial TP target 90% of the timeand price will not get anywhere close to your hedge order or yourinitial stop loss. In this case, the hedging strategy replaces theneed for a normal stop loss and acts more as a guarantee of profits.
Theabove examples are illustrated using mini-lots; however, as youbecome more comfortable and proficient with this strategy, you willgradually work your way up to trading standard lots. The consistencywith which you will be making 30 pips any time you want will lead tothe confidence necessary to trade multiple standard lots. Once youget to this level of proficiency, you profit potential is unlimited.Whether you realize it or not, this strategy will enable you to tradewith virtually no risk. It's like having an ATM Debit Card to theWorld Bank!!!!!! (In exchange for sharing this amazing technique withyou, I would truly appreciate it if you would pay me back by openingup a forex trading account by going through the links on my websitehere – no extra commissions will be charged and as you becomerich I will also receive a small percentage of the spread. Enjoy thisstrategy, have a successful future and spend time with your family!
2)A variation of the strategy using a double martingale
Thisstrategy is a bit different but is quite interesting as you stillprofit when you hit a stop loss! Using the below picture as anexample, you would purchase 1 lot (indicated with B1) with the ideathat it will rise. But you will also sell 1 lot (at S1, which is thesame price as your buy price) at the same time, in case the pricegoes down. Then follow the diagram. When a martingale stops, theother one takes over. This strategy can earn pips during periodswhere price is ranging. As your winning transactions only require anadditional lot to be put into play, it doesn't really make much of adifference in relation to the other martingale. There is always arisk for the first martingale during ranging periods (flatconsolidation periods), but this risk is mitigated by the pips youare earning from the second martingale!
3)A lower-risk martingale strategy (my favorite of the 3
strategiesin this document!)Here's what you do: if price is trending up, placea buy order for .1 lots (also place a Stop Loss at 29 pips and a TakeProfit at 30 pips). At the same time place a Sell Stop order for .2lots 30 pips below with a 29 pip SL and 30 pip TP. If the firstposition hits SL and second order is triggered, place a Buy Stoporder 30 pips above your new order for .4 lots. Etc... Your ordersizes will be .1/.2/.4/.8/1.6/etc...
Ifever your stop loss is hit and the new order has not been triggeredbecause price has reversed, place this new order on the oppositeside, where price is now headed towards (in this situation you willhave both a buy stop and sell stop order set up for the same lotsize).
Irecommend that if you have a $10,000 (or €) account, your firstposition be .1 lots. If you have a
$20,000account, I would recommend trading two different pairs (ex: if you golong on EURUSD, also go long on USDJPY, that way you're sure to seehalf of your open positions hit a take profit, and this willtherefore divide your overall risk in half). I would go so far as totrade 3 different pairs if you're trading a $30,000 account, and onlyincrease the weight of your first positions as you have more capitalto trade with.
Ilike this strategy because your overall position sizes (and thereforerisk) end up being lower:
-Original sure-fire strategy position sizes: .1, .3, .6, 1.2, etc.
-This strategy's position sizes: .1, .2, .4, .8, etc.
