In this article, I am going to reveal exactly how you can make money from Forex using grid techniques of buy-and-sell. This hedged currency trading system applies the rule which allows one to close and make money from different transactions whether the market goes or down.
The only way for that to be possible is for the trader to have an active buy-and-sell transaction.
Assuming a grid with 100 pips. We are going to begin with the easiest formation to show the principles involved. This formation is a retractment formation whereby the price ascends before going back to starting point.
Unfortunately, things can be quite tricky from there. To make things easier for you to understand and apply, we shall ignore all broker spreads.
Let us say that a trader enters the market with a buy 1 and sell 1 deal active when a currency is at a level of 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 2 and sell 2 deal at 1.0200.
Sell 2 has now gone positive by 100 pips while buy 2 is moving towards the other way of losing 100 pips. According to the grid trading rules, you would cash the 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 at 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 1 and sell 2 gained 100. On the other side sell 1 is now breaking even with buy 2 at -100. This gives a total gain of 100 pips. This should be sufficient reason for you to stop trading momentarily and start celebrating your first ever Forex success.
Still you must not get complacent and greedy like most traders do at this point. Though it is difficult to overcome the feeling of trading more to make more money, you got to understand the fundamentals and formula behind those activities.
To help you better, I urge you to read and draw the movements on paper or notepad as knowing and not knowing could grow or diminish your finances at light speed.
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