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Learn How You can Make Gains from Using the Forex trading Grid Technique

Discussion in 'Education Centre' started by shamoon633206, Apr 15, 2012.

  1. shamoon633206

    shamoon633206

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    Learn How You can Make Gains from Using the Forex trading Grid Technique


    The most important part of how to make money using the no stop, hedged, Forex trading strategy will now be covered. In the preceding articles in this series we reviewed trading without stops, not being concerned about which way the price moves and places to cash in on profitable transactions. We are now going to show how you would make money buying and selling simultaneously using the grid strategy.

    The no stop, hedged currency trading grid system uses the rule that one should be able to close a transaction at a gain no matter which way the market moves. The only way this is logically possible is that one would have a buy and a sell transaction 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 grid gaps of 100 pips. We are going to use the simplest formation to show the principles involved. This formation is the 100% retractment formation where the price goes up to a grid level and then returns back to the starting grid level. Regrettably things become quite mathematical from here. We are also ignoring broker spreads to keep things simple.

    Let us say that a trader enters the market with a buy (buy 1) and sell (sell 1) deal active when a currency is at a level of say 1.0100. The price then goes to level 1.0200. The buy will then be positive by 100 pips. The sell will be negative by 100 pips. Now we would cash in our positive deal and bank our 100 pips. The sell is now however is carrying a loss of -100 pips. The grid system requires one to ensure that the trader can cash in on any movement in the Forex market. To do this one would again enter into a buy (buy 2) and a sell (sell 2) deal at this level (level 1.0200).

    Now, for convenience let us say that the price moves back to level 1.0100 (the starting point).

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

    The 4 transactions added together now incredibly show a gain:- 1st buy (buy 1) cashed in +100, 2nd sell (sell 2) cashed in +100, 1st sell (sell 1) now breaking even and the 2nd buy (buy 2) is -100. This gives an overall a gain of 100 pips in total. We can liquidate all the deals and have some champagne as we have made a profit of 100 pips.

    Please make sure you understand the mathematics behind the activities discussed above. You may have to reread and draw the movements on a piece of paper to make sure you understand the concept.

    This formation is the 100% retracement formation where the price goes up to a grid level and then returns back to the starting grid level and results in a nice profit for the forex trader. There are many other market movements that turn this strange Buy and Sell at the same time activity into profits. The next article will cover the 50% retractment formation which produces the same amount of profit.

    There will be much more on the no stop, hedged grid trading system in future articles in this directory. Do not miss them, whatever you do.
     
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  3. samandar

    samandar

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    I use this technique too. But its is a bit complicated and time consuming.
     
  4. amit.neogi

    amit.neogi

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    Your trading strategies and trading Grid Technique is amazing.am read the all pages if its realy helpful then again said amaizing
     
  5. gkintl

    gkintl

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    The issue is that grid trading is not allowed by many brokers. We need to read through the fine print before doing such things. In most cases all profits are neutralized. However, if a broker places no restrictions then we will be able to do this in a very successful way. May be we need to use three or four different brokers simultaneously. That would ensure that such an activity remains unnoticed. However, that demands more capital as well. I will certainly try it out anyway. Looks very promising.
     
  6. Ruchibhar

    Ruchibhar

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    forex is a time consuming process. thanks indeed for this information.
     
  7. amit.neogi

    amit.neogi

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    I think at forex there has a lot of process and technique for trading but one of the best technique is grid view techniques it a simple and easy method to trade properly if you can understood it.
     
  8. Dmitriy Ushakov

    Dmitriy Ushakov

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    Forex Setka Trader Expert Advisor uses in its strategy both methods: averaging and Martingale method. It shows excellent results even on standard settings. It is good advantage from other advisors.
     
  9. Tom Latham

    Tom Latham

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    Unfortunately, I didn’t get your points (based on your trading technique)! Can you please explain more by different way? Or it would be better if you added here relevant pictures of grid technique!
     
  10. winchent13

    winchent13

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    I've heard that not all brokers let you use Grid Technique. Although in my opinion, brokers shouldn't limit traders when it comes to choosing the trading strategy.
     
  11. Vabue

    Vabue

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    There are the prospects which you can learn in order to get success on the forex market. Yes, grid technique has good reputation on the market and huge reputability as well. You people have to use it in order to stay on the market for a long time. Thanks!
     
  12. sininfinity

    sininfinity

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    Usually dealing desk brokers will not allow certain type of trading. Non dealing desk (NDD) broker would not restrict any kind of trading. Also many don't prefer grid trading method. I haven't traded myself so can't suggest anything.
     
  13. Svetlana Loboda

    Svetlana Loboda

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    Correct! By the way, now I’m trading based on Price Action trading strategy; interestingly it works everywhere since my major is market chart! I don’t rely on any additional support or any kind of technical tool.
     
  14. sininfinity

    sininfinity

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    Well with experience, most traders leave their 3rd party tools behind. I also don't use any indicator for my analysis.