Advanced Forex Trading Techniques

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Advanced Forex Trading Techniques
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Index

1. Forex Trading
2. Advanced Forex Trading Techniques
3. Hedging
4. Position Trading
5. Forex Options
6. Scalping

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Forex Trading

• In the beginning forex trading seems like it is
  simple.
• It seems like you only do a job as a trader is to
  pick what direction the currency pair is going to
  go and collect the profit.
• You are thinking of trying to find the 100
  percent accurate forex trading system on the
  internet.
• If only it were that much simple.

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Advanced Forex Trading Techniques
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Hedging

• Hedging is a way to reduce the risk by taking
  both the sides of trade at once.
• If broker allows it, an easy way to hedge is just
  to initiate a short and long position on the same
  pair.
• Advanced traders sometimes use the two different
  pairs to make one hedge, but that can get very
  difficult.

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Position Trading

• Position Trading is based on your overall
  exposure to a currency pair.
• Your position is the average price for a currency
  pair.
• Example You might take a short trade on EUR/USD
  at 1.40. If the pair is ultimately trending lower
  but happens to retrace up, and you take another
  short at 1.42 at your average position be 1.41,
  you will be back in overall profit.

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Forex Options

• A forex option is an agreement to purchase the
  currency pair at a predetermined price at a
  defined time.
• Example You are long the EUR/USD at 1.40, and
  you feel that there is a chance that it falls to
  1.38 in overnight trading.
• Not requiring to risk a more profound reaction,
  you decide to put a stop at 1.3750, setting up
  potential loss of 250 pips.

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• 250 pips sound painful, so you choose to use a
  forex option to lessen the pain.
• You purchase an option for overnight hours with
  the strike price of 1.3750.
• If EUR/USD goes up and never touches 1.3750
  overnight, you lose the premium that you paid for
  the currency option.

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• If the EUR/USD falls and touches your option and
  stop loss, you would receive profit from your
  option, depending on how much of a premium you
  paid, and you realize the loss of long trade on
  the EUR/USD.
• The options profit make up for some of that loss
  on the currency trade.

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Scalping

• Scalping is making a very short-term trade for a
  few pips using the high leverage.
• Scalping is best done in conjunction with a news
  release and supportive technique conditions.

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• Many beginning forex traders start with the
  scalping, but it does not take long to figure out
  it how much you can lose if you do not have the
  idea what you are doing. In general, scaling is a
  risky strategy that doesn't pay well in
  comparison to its risk.
• If you are going to make scalping trades, it is
  best to do them in conjunction with overall
  trading position, not as a primary method of
  trading.

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• Advanced Forex trading is about seeing all the
  options when you make a trade.
• Aside from using the masterful risk management
  and extreme caution, advanced trading can be an
  alternate way to make profits and control losses.
  
• Advanced trading techniques are just about using
  market's behaviour to your advantage.

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• Learning to use advanced techniques correctly is
  what give you the edge that makes you stand apart
  from the average trader.

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Thank You