hello, i have use trading on one direction strategy ,as we know forex is volatile and we see that eur/usd pair still move in 1.33 and 1.29 for a long time if we do not close the deal at loss and add more lot size for every time the price go against the deals and wait the price to return we will recover the loss and gain profit, what is your opinion?
It is true that many traders espcially new use this strategy - this may be called as averaging down or averaging up strategy. It is good but we should ensure about the fundamentals of the instrument we are trading first. Also this strategy works and is profitable more if we keep on closing trades that come in pre-determined profit and leave the others to be closed in future.
If you do this you just gambling and not trading , opening orders and closing orders again and again and not only that, you trading this method without set a stop loss !!! this is absolutely just like a betting game.Quote:
Originally Posted by lode
I also occasionally use it, but it should be:
- know the range limit that may occur when the price moves in the opposite direction to your first open trading positions.
- continue to use risk management well, the use of margin percentage affects the vulnerability of your trading account, then use it wisely.
- entry position of the second and so should be when the price is already saturated and began to move back toward the line with your first open trading positions.
if you know the range limit that may occur when the price moves in the opposite direction to your first open position trading - you may know from the results of your technical analyzes # then it is not a gambling or betting.Quote:
Originally Posted by ezincenter
if it is known that the likelihood that price will continue to move with a long range in the opposite direction of your first open trading positions, then you should close your trading position and accept the fact that not every trade should be profitable. or you go to the second position in the direction of price movements (hedging). then if the price is already saturated and begin to reverse direction toward the same direction as the first open position, then close the second open position (which was profit it) and you can re-open the third trading position that is in the direction of price movement which was in line with your first open position.
- use the size of the margin percentage for the first open trading positions largely determine whether or not to open a safe second place and so on.
now the question is what if the price will not come back and will break the resistant.?so then you will loose all of your capital since there is no stoploose.we cant just keep on add to our loosing positions.a good strategy cant be blind.it must have set rules and the main purpose to finish the trading with profit.so you have to focus on the safety of your funds first.
No never good when you buy , buy and again buy if you do this then you go for a big loss at last remember one think if you have 4 buy and market go down then you are in trouble and go for big loss if you have 1 buy and 1 sell then you safe but it is not a way for trading:peace:
i think that this strategy is good for those traders who has a lot of money in his account and can allow negative floats for long time....because sometimes market will move alot of pips and then come back to its original price in months...so if we are using this strategy, then we should invest so much money that it can cover the negative floats of our opened position for a long time.....but i will never follow this strategy, because if market moves significantly, then it will be hard to save my account from margin calls ...it also means that we are trading blindly and do not follow market news and analysis....so we should get every news and analysis about forex market and then trade according to that...........Quote:
Originally Posted by lode
i think you need to hve more balance to prevent from margincalls if you wanna do like that but sometimes it may be risky if you got margincall so becareful and think of that and chose the strategy
I think we can manage to avoid margin call by using little of available margin on each trade and using lower leverage but there are times when market witness very huge volatility and at such times it may ruin our strategy i think we should have some mechanism to close our trades on indication of high volatility and avoid bigger losses.Quote:
Originally Posted by forexman
in this technique traders should make his trade with very small size which is not effected by margin call cause market move with many positive and negative news effect, so stand on right position is not very easy so buy a pair and when it is in opposite direction then take another quote same again is not suitable in Forex always. ThanksQuote:
Originally Posted by forexpips