This hedging strategy forex, you can also call the strategy «safety net trade position».
This forex strategy requires mandatory implementation of the following conditions: — the size of commercial deposit should be 3 times more than would be required to stage a trading position, or, respectively, for the same amount of the deposit can correspondingly reduce the size of the position is torn off 3 times.
- Recommended temporary terminal for trading on the strategy — M15 or above.
- Currency pair — any.
First, of course you need to analyze the market and more likely to choose the direction of the current trend and in what direction will be open our trading position.
To analyze the trend lines suggest that use the following indicators forex, which includes a standard set of trading terminal Metatrader 4:
- Accelerator Oscilator
- and ZigZag
To started a line of support and resistance on the thorns indicator forex ZigZag, eventually get a channel of the current trend — let’s say this channel is directed downwards.
You must then examine the tendency of commercial graphics inside the channel trend, we assume it is much pressed to the line of resistance — therefore, combined with the testimony of the indicator Accelerator Oscillator (suppose it tells us about the strong growth) — this tells us about a possible break through resistance.
Then check the readings of the same indicator for Accelerator minute and 5-minute chart and it already determine how soon will this break (if it happens). And only then decide for themselves how best to put the pending orders, or to make a deal «with the hands».
If you have your own strategy for determining the direction of the trend — you can use it or take any of the strategies forex published on this site.
After analyzing the market open in the right direction of a trading position.
For example it will BUY.
If you guessed right and the market moves in the direction of your position, then begin installing the trailing stop and the accumulation of profit, takes her, but if the market went against you — in the opposite Halla — opens double-trading position in the direction of the market, such as a 2 position SELL, if the market and goes on SELL, then you have the account starts to accumulate profits from a trading position and 2-SELL I hedge loss on 1 st trading position BUY, and ultimately cancel each other out.
Once, when in the end you have finally moving in the direction of the market and count the profit on the account uvelililos and covered all the spreads, as well as still have hurt profits — start hurrying to close the hedging orders.
The situation is worse if the market, after we open the dual trading position SELL, starts rising again. In this situation, you need very quickly to close the hedging each other’s trading positions, BUY and SELL and open trading position double BUY. After that loss the remaining SELL trade position will be fixed by mutual closure of a BUY and a SELL.
In the end, which would not move the trend — you will still profit on the trade account. But remember that if you frequently make mistakes in determining the trend, you can lose a lot of spreads and on the negative closed positions.
Therefore, this forex strategy would be more effective if you use it without undue panic and bigotry, as well as after tchatelnogo conducting market analysis and determine the trend.
