Forex Profits by Buying and Selling at the Same Time

Use the advantages and weaknesses of trading using the hedged, grid trading system to trade volatile markets.

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.

The hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely.

Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. 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 requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100.

The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200.

Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even.

The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some champagne.

There are many, many other market movements that turn this strange "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 website for those traders whose curiosity has been aroused.

by Mary McArthur

Mary McArthur (marymacarthur@expert4x.com) is an Expert4x trader. As an expert, she authored a free hedged grid trading course on www.expert4x.com.

http://www.earnforex.com/articles/forex-profits-by-buying-and-selling-at-the-same-time

Broker Alert List - Vantage FX

There are few brokers I am taking note. To start with

Vantage FX.
http://www.forexpeacearmy.com/public/review/www.vantagefx.com?page=3

Kerim, Istanbul, Turkey Rating: Date of Post: 2013-03-26 Review: If you lost money, you lost. If you made money, you lost again. With Vantage profit is not among the options.They will make up any reason to erase ONLY profits, and will leave you with losses. Complaint to ASIC is the way to go for now.

petersurrey, UK, United Kingdom Rating: Date of Post: 2013-03-24 Review: Yet another bucket shop, this time refusing to allow withdrawals because of some spurious liquidity provider questioning a cheap news trading bots transactions. Luckily all funds were withdrawn before receiving this message, ironically, because of the poor liquidity it states was being taken advantage of! How do these brokers get away with it? Advising that it requires 30 days to investigate trades and only then will it allow withdrawals and further trading if it decides..stay away!

JOHN, , Italy Rating: Date of Post: 2013-03-23 Review: I got an email from Vantagefx suspending trading in my account. They allege that my trading is "suspicious and in particular exploiting internet & connectivity delays in order to take advantage of arbitrage on the Trading Systems.". My DEPOSIT AND PROFITS ARE frozen for up to 90 days. This is the article to which they refer: "20.5 Internet, connectivity delays, and price feed errors sometimes create a situation where the price displayed on the Trading Systems do not accurately reflect the market rates. The concept of arbitrage and “scalping”, or taking advantage of these internet delays, cannot exist in an over-the-counter market where the client is buying or selling directly from the market maker. Vantage FX UK do not permit the practice of arbitrage on the Trading Systems. Transactions that rely on price latency arbitrage opportunities may be revoked. Vantage FX UK reserves the right to make the necessary corrections or adjustments on the Account involved. Accounts that rely on arbitrage strategies may at Vantage FX UK’s sole discretion be subject to Vantage FX UK ’s intervention and Vantage FX UK’s approval of any Orders. Any dispute arising from such quoting or execution errors will be resolved by Vantage FX UK in their sole and absolute discretion". 1) I'm a news trader (I use an autoclick similar to the one availble con fpa). 2) As I know they should investigate max after 24h from sending the statemen, they cannot do that after 1 month, do you confirm? 3) Can they refuse to send my deposit back but continuig to investigate on profits? They refuse to send my deposit back (I've all chat proofs). 4) Can they hold money for 90 days? 5) Can they avoid answer to my many emails? ( I receive an answer only in chat now but they say they want to talk on phone so there won't be any proofs anymore). 6) Can they send me a contract that I've to sign where I accept to delete all profits (because in their thought it's arbitrage) so that I receive my deposit back? THIS IS VANTAGE.

LK, singapore, Singapore Rating: Date of Post: 2013-03-22 Review: My MT4 account fund was freezed by Vantage FX and Go Markets yesterday, accusing me of illegal trades. Both of these two brokers are together. I have being using same EA trading on other broker with no complaint, but for Go Markets, once I made reasonable profit, my account was suspended and I was threatened to sign a document to declare all my trades will be voided, then my remaining fund can be returned back to me. That include trades happening months ago. This is ridiculous. I need helps and advice from FPA. Thnks rgds

Guppy Discretionary Day Trading

Discretionary day trading

can be a challenge because you mix together the two main disciplines of determining entry/exit points and direction (technical and fundamental analysis), and you have to keep up with the dynamic shifts in both daily. It is my hope that my reviews will help those interested in this style of trading to internalize market behavioral tendencies by reviewing economic themes and events daily against a basic technical framework of horizontal lines, Fibonacci retracements, candlestick patterns, etc.

If applicable, I will also describe how a simple trade management technique called "scaling in" could have been employed into the trades to maximize a trade's potential reward-to-risk profile.

My Technical Framework:

15 minute candlestick chart

Horizontal lines (aka "areas of interest" or "inflection areas"): I feel these levels have the potential to draw the attention of traders and attract the most market/limit orders on the day. These areas of interest could possibly affect market direction and momentum.

• Week Open Price (WO): The currency pair's opening exchange rate on Sunday, 4pm ET (regardless of day light savings).
• Previous Week's High and Low (PWH/PWL)
• Weekly Average True Range High and Low (WATR): The top and bottom levels of the average weekly range of movement. These levels are calculated using the 20 period Average True Range indicator on the weekly chart. This volatility number is then divided by 2 and added/subtracted to the week's open price. I feel these areas can attract orders from range/reversion-to-mean style traders.
• Day Open Price (DO): Exchange rate at 4pm ET (regardless of day light savings)
• Previous Day's High and Low (PDH/PDL)


• Daily Average True Range High and Low (DATR): The top and bottom levels of the average daily range of movement. These levels are calculated using the 20 period Average True Range indicator on the daily chart. This volatility number is then divided by 2 and added/subtracted to the day's open price. I feel these areas can attract orders from range/reversion-to-mean style traders.


• Major ('00) and Minor ('50) Psychologically Significant Levels (MaPs and MiPs): Price levels ending in '00 or '50 tend to attract large institutional orders, thus potentially affecting market direction and momentum.


• Asian session High and Low: The probability is low, but the top and bottom of the Asian session has the ability to attract attention or orders, so it's a good idea to watch those levels. Also, they are good markers to set orders for a breakout trade if the Asia session range is tight and volatility spikes at the London session open.

One tendency I have observed over time is that Weekly price levels tend to influence price action more than Daily levels. Also previous High and Low levels tend to be stronger than ATR calculated levels.

Reversal Signal using Stochastics: When the Stochastic indicator (14,3,3) indicates potential extreme Overbought (+80)/Oversold(-20) conditions. The stochastic indicator is not always used depending on the current market environment (trending vs. ranging).

Divergence: When the stochastic indicator and price action diverge in movement. Please visit our Divergence Trading lesson for more info.

Fibonacci Retracements: Used during trends to find potential reversal points to get in the overall move at a better price.

Reversal candlestick patterns: bullish/bearish engulfing, doji's, hammers, morning/evening stars, three inside up/down, etc.

Method/Trade Setups:

Using the above technical framework, as well as taking into account the market environment and the potential influence of data releases and news events, I will search for, and breakdown, missed trade opportunities like breakouts (strong candles, news events, or sentiment change), a break and retest, intraday trends and retracement, and reversals, etc. at the end of the US trading session (4 pm ET).

To show you what how well the markets could possible react to these levels, check out my example chart below.

On December 14, 2010, EUR/USD reacted well to a few areas of interest and trade signals.

First, there was the break and retest of the Previous Day High (PDH) at 1.3432. Once broken, it served well as support when it was retested an hour later and the market rallied from there to just under 1.3500 for around 70 pips.

Next, there was a divergence in price action vs. the stochastic indicator which served as a potential reversal signal just under the Major Psychological (MaPs) level of 1.35. That combination did mark the next resistance area and the market dropped to its stopping point right at the Asia session low around 1.3360--around a 140 pip move or a roughly 1% change.

Finally, the market bounced higher about 80 pips and retraced 50% of that strong move down. This was enough for sellers to start jumping in, holding the rally, and reversing the market back down for another 80 pip move on the day.

In this example, we can see how the markets take notice and react to these levels and signals, as well as how they can be used as points of reference for simple breakout or support/resistance plays.

Now, I'm sure you're asking yourself, "Will the markets ALWAYS react to these levels and will I be able to catch turns every time?" There's a very simple answer to that...

HECK NO. Let me repeat that again...HECK NO!

The markets will not always react to our usual inflection points (or areas of interest) because of any infinite number of variables ranging from volatility spikes on a set of surprise data points to a "fat-fingered trader" mashing the wrong buttons by accident can invalidate those levels in a flash. Always remember that anything can and WILL happen in the markets. But traders do take notice of these areas often enough where this framework does give you a better chance of making better entry and exit decisions. And with daily deliberate practice, we can develop consistency and confidence in using this framework over time.

S&P Trading Range for Sep and Oct-2013

As long as the ES remains below the 1638/41ES resistance region early in the week, this decline is very likely. It is confirmed with a strong break down below 1617ES.

If we do reach the 1601ES level (or even as low as 1591ES), then I would expect a bounce as high as the 1618ES region, and, assuming we don't break back out over 1618ES, we should head down to the 1574-1584 region before consolidating one more time below the 1601ES region, and ultimately heading down to the 1560ES region.

Alternatively, if the market is able to move through the 1638/41ES resistance region, and confirm with a strong move over the 1645ES level, then I think the market will be working its way up to the 1674-1686ES region over the next week or two. So, the difference between these two alternatives is that the market will complete its correction into the 1500s under the first scenario in September, whereas the second scenario will likely take us into October.