This article is an example of a series which inspects the benefits and weaknesses of trading using the hedged, grid trading system to trade volatile markets. We're going to look at how money can be manufactured by breaking a number of trading truths or elements, * cut your losses and let your profit run and * there's nothing to gained by entering into buy and sell deals at the same time. The hedged grid trading system uses the principle that one should be ready to cash in at a gain whatever way the market moves.
No stops are therefore needed at all. The only real way this is logically likely is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but we'll take some to have a look at this closer. We could say a trader enters the market with a buy and sell active when a currency is at an amount of say a hundred. The price then moves to 2 hundred. The buy will then be positive by 100 and the sell will be negative by a hundred.
At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system needs one to make certain that cash in on any movement in the market. To do that one would again enter into a buy and a sell exchange. Now, for simplicity, we can assume the price moves back to level a hundred. The second sell has gone positive by one hundred and the second buy is carrying a loss of -100. According to the guidelines one would money the sell in and another a hundred will be added to your account. That brings the total cashed in at about that point to two hundred. Now the 1st sell that stayed active has moved from level 2 hundred where it was -100 to level a hundred where it is now breaking even. The four transactions added together now magically show a gain:- first buy cashed in +100, second sell cashed in +100, 1st sell now breaking even and the following buy is -100. This gives an overall a gain of one hundred in total.
We will liquidate all of the transactions and have some poo. There are plenty of other market movements that turn this weird buy and sell at the same time activity into gains. These will be covered in future articles and are covered in a free grid trading course which is available at the expert-4x.com internet site for those traders whose curiosity has been awakened. There'll be more about the hedged grid trading articles to be issued continually.
No stops are therefore needed at all. The only real way this is logically likely is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but we'll take some to have a look at this closer. We could say a trader enters the market with a buy and sell active when a currency is at an amount of say a hundred. The price then moves to 2 hundred. The buy will then be positive by 100 and the sell will be negative by a hundred.
At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system needs one to make certain that cash in on any movement in the market. To do that one would again enter into a buy and a sell exchange. Now, for simplicity, we can assume the price moves back to level a hundred. The second sell has gone positive by one hundred and the second buy is carrying a loss of -100. According to the guidelines one would money the sell in and another a hundred will be added to your account. That brings the total cashed in at about that point to two hundred. Now the 1st sell that stayed active has moved from level 2 hundred where it was -100 to level a hundred where it is now breaking even. The four transactions added together now magically show a gain:- first buy cashed in +100, second sell cashed in +100, 1st sell now breaking even and the following buy is -100. This gives an overall a gain of one hundred in total.
We will liquidate all of the transactions and have some poo. There are plenty of other market movements that turn this weird buy and sell at the same time activity into gains. These will be covered in future articles and are covered in a free grid trading course which is available at the expert-4x.com internet site for those traders whose curiosity has been awakened. There'll be more about the hedged grid trading articles to be issued continually.
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