Although forex trading is fast becoming the most popular way of earning extra money from home, not many people have the knowledge to maximize their profits and limit their losses to an 80% success rate causing them often to lose in the long term. At some point in most trades a trader will find themselves in profit, It is how you then manipulate your stop loss and limit orders that will see the maximization and limitation of profits and losses.
Just like trading stocks and commodities the forex market moves in waves, it is the knowledge of getting into a trade on the upward or downward push of these waves that successful traders use to maximize profits and limit losses. One of the safest ways of trading these trends is to enter a trade just as it makes it makes a new high or low and locking in that profit or locking in that limited risk.
To make explaining this method as easy as possible I am going to use the popular currency pair GBP/USD. Imagine the trend of this volatile currency has just broken through a previous resistance level in a buy situation. You enter the trade as it makes a new high and it pushes you into 20 pips profit then the momentum slows down.
It is at this point that the decision you make will see you making large amounts of profit, a 20 pip total profit or you can reap the benefits of both by using this simple technique of maximizing forex profits. Forex trading doesn’t have to be as simple as entering and exiting trades at set amounts.
Going back to the example of the GBP/USD, you are now 20 pips in profit. Do you stick with the trade knowing that it will probably retrace before it puts you in profit again or do you take your 20 pips profit and then be disappointed when you see the trend continue 100 pips in the direction you are trading. The answer is you make the most of both worlds, you take out 80% of your profits at the 20 pip margin and leave 20% running, but you move your stop loss up to your entry point. The scenario is; if you trade at 10 a pip you have just made 160 profit you know have that 160 locked in with an additional risk free trade running at 2 a pip, if that trade continues running on a long term basis you can leave your stop loss where it is and look to bag 100’s of more pips at no risk. The worst case scenario the trade reverses back through your entry level and you only take the original 160 profit.
Adam had been trading forex for years with little success. Adam originally had no experiance of the forex markets so hesigned up to Colin Atkin’s private members club. Colin is a professional trader who shares his trading live, all you have do is copy what he does and take the profits. Since Adamsigned up to Colin he has had the money to invest in other projects.