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This article is one of a series which looks at the advantages and
weaknesses of trading using the hedged, grid trading system to trade
We will look at how money can be made by breaking a number of
trading truths or principles; * cut your losses and let your profit run
and * there is
nothing to gained by entering into buy and sell deals at the same time.
I have seen the hedged grid system been used successfully (and
highly unsuccessfully) over the last few years. Unfortunately the
failures tend to
discourage traders from taking advantage of this great system. I have
found that the failures are mainly due to ignorance, impatience and
reasons for trading failure).
In a nutshell the grid system uses the following methodology.
You start by buying and selling a currency. When the price moves a
(grid leg) you cash in the positive leg, leave the negative leg and buy
and sell again. Sooner or later the system goes positive and you would
then cash in
when it is positive.
Scalping the forex market is something that all new traders aspire
to do. It is however not easy and requires allot of concentration and
Once you decide on a set you are going to use you will need to
spend a few months religiously for a couple of hours a day trading on
demo until you get to know your setup and a feel for scalping it.
Hedging is defined as holding two or more positions at the same
time, where the purpose is to offset the losses in the first position
by the gains
received from the other position.
Usual hedging is to open a position for a currency A, then
opening a reverse for this position on the same currency A. This type
of hedging protects the
trader from getting a margin call, as the second position will gain if
the first loses, and vice versa.
However, traders developed more hedging techniques in order to
try to benefit form hedging and make profits instead of just to offset
In this page, we will discuss, some of the hedging techniques.
Today, using information and trading platforms has become a de
facto requirement for successful trading in the financial markets.
Their advantages as
compared to conventional trading schemes include, for example, an
unprecedented speed of processing and delivery of information to end
users, the level of
integration with data providers, and a wide array of built-in technical
Among one of the important concepts a new forex trader should know
is what a Moving Average means, how it's calculated and what its use as
a trading indicator is.
Moving Average is defined as a technical indicator that shows
the average value of a particular currency pair over a previously
determined amount of time. This means, for example, that prices are
averaged over 20 or 50 days, or 10 and 50 min depending on the time
frame you are using at the moment of your trading activity.
This article is mostly for people that already know what the Forex
market is and at least know the basic concepts. If you have no clue
about what this market is or you have never heard about it, I will give
you a very brief explanation bellow.
Forex is the acronym for Foreign Exchange Market. This is the
biggest and most liquid market of the entire world today. One to three
trillion dollars exchange hands at Forex every day. That's a huge
amount of money. No stock market exchange of any country come close to
This market is huge. It is a sea of money full of sharks and
dangerous waters, but it is also the only market where you at least
hypothetically can make $1,000,000 in two weeks starting with only
I say hypothetically because what happens often is that
people blindly gamble their money at Forex without knowing anything
about it and they lose their shirt. That's why I say to you: be
careful! This market is profitable, but you need to learn the basics
well, do your homework and demo trade a lot.