Forex trading is fast becoming the most popular way of earning extra money from home this century, however seldom people know how to maximize their profits and limit their risks effectively enough that they get an 80% success rate. One of the biggest reasons for failure in the forex markets is being in profit at one point in the trade then seeing those profits and more disappear. It is not greed that is the cause of this, but simply not manipulating the stop loss in a way to maximise your profits and limit your losses.
It is common knowledge that the forex market moves in waves and it is these waves that successful traders use to make profits from day trading the forex market. In certain trading systems and one that I believe to be the most successful traders enter a trade on the upward or downward push of a trend. It is manipulating the stop loss on these trades that can give a risk free trade after the push.
For an example of this method I am going to use the volatile and popular currency pair GBP/USD. Imagine the trend has just broken through its previous resistance level to make a new high in a buy situation; you enter the trade as it makes its new high and the trend continues into 20 pips profit then slows down or losses momentum.
Now is the time to make the decision on whether you take your 20 pip profit or risk the trade reversing back and taking out your stop loss before continuing in the right direction. It doesn’t have to be as straight forward as taking out all your profits as once, in fact professional traders seldom do.
Using the example we started earlier you are now in a 20 pip profit situation with the trade starting to lose momentum. In this scenario I am going to tell you what I would do. I am trading at 10 a pip and I see that I am 20 pips in profit on a strong upward trend, but the trend is losing momentum so I take out 80% of my profits or 160. I then move my stop loss up to my entry level so the worst that can happen is my only profit is 160. In the likely event of the trend reversing back to just above its previous resistance (my entry point) and then continuing in the trended direction will see me maximize my profits at no further risk.
Adam had been trading forex for years with little success. Adam, at first had no knowledge of the forex markets so hesigned up to Colin Atkin’s selected members club. Colin is a professional trader who shares his trading live, all you have do is copy what he does and take the proceeds. Since Adamsigned up to Colin he has had the money to invest in other projects.