Friday, August 7, 2009

forex 25

Can you make profits by Buying and Selling Simultaneously in the Forex?

April 12th, 2009 by Forex Admin | No Comments | Filed in Currencies, Forex learning

There are lots of views, principles and truths that exist regarding Forex tradingdone by hedging using the grid trading system. Some believe that one should cut one’s losses and let your profit run, while some believe that one cannot make profits in the Forex market by making transactions of buying and selling at the same time. Now, let’s see how you can make money by breaking these rules. The principle behind a hedged grid trading system is that one should be in a position to cash in at the point of gain, irrespective of the direction that a market takes. This means that a stop is not required at all. This scenario is possible only when one has a buy and sell active simultaneously. But most traders consider that this is highly risky and extremely foolish.

So, let’s take a closer look at this. Say for example that a trader enters the market when a currency has a level of about 100, with a buy and sell active. This means at the point of entry his buy will be a positive 100 and the sell a negative 100. Here is where we deviate from the principles and cash in the positive and increase the trading account by 100, which makes the sell as a negative 100.