Don't forget the basic techniques of forex strategy

Just a reminder when the brain is too tired with various forex strategy techniques :)

Here are some basic forex strategy techniques that all forex traders should know:

Hedging Techniques

Hedging is a situation where we open 2 positions opposite the currency and the same number of lots. Often hedging is used if the price reverses direction and the trader does not want the loss to increase without a cut loss (closing the position even though it is a loss).

In general, they use this technique without a stop loss. Another term for hedging is locking.

Example: A trader opens Buy EUR/USD 1 lot then the price moves not as expected (down) and the position is still a floating loss (floating loss) 20 points, the trader can open Sell EUR/USD 1 lot in the same currency so that the loss is locked only 20 points. Even if the price moves in any direction, the floating loss remains 20 points

Averaging Technique

Averaging is one way to minimize losses by opening similar positions at different levels. The purpose of averaging is to use the average of the different price levels ordered to minimize losses.

Example: A trader opens Buy EUR/USD 1 lot at a price of 2.0100, but the price moves down to the level of 2.0000 so that he experiences a floating loss of -100 points. The trader can averaging by opening a Buy EUR/USD 1 lot position at the price of 2.0000 at the same time. This means there are 2 open positions.

First position floating loss -100 points. Second position 0 points. (assuming without taking into account the spread). If then the price moves up towards 2.0050 then the first position of floating loss is -50 points, the second position is 50 points profit. In total the two positions break even (BEP). When the price moves up above the 2.0050 level.

Then it means the trader has made a profit.

Scalping Trading Techniques

Scalping is a trading technique on Forex that takes advantage of market momentum while moving flat or zig zag (bouncing small), by opening and closing orders in a short time (generally less than 5 minutes) and in a continuous barrage of frequency. .

With the hope of taking small profits but can generate quite a lot of value due to the barrage of frequencies.

Generally, the scalping technique is to use currency pairs that are not too volatile and are carried out during quiet market hours.

Martingale Technique

Martingale is a trading technique that uses multiplication (usually x2), with the hope that a win in the last position can cover losses in all previous losing positions.

Example: Open Buy 0.1 lot, after a loss, the new Open returns at 0.2 lots, then a loss then the new open returns at 0.4 lots, and so on until the last position reaches a profit that can cover losses from all previous positions.

For the use of the martingale technique, you must use a small initial lot and a large capital, so that it can make your trading close to the Holy Grail, namely perfect trading. The bigger your capital and the smaller the initial lot, the stronger the resilience of your trading account.

But please be careful too because the martingale technique can also result in very fatal losses if there is a slight error or done carelessly.

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