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The "Sure-Fire" Forex Hedging Strategy

(as shared by John Carricaburu) The forex trading technique below is simply...awesome. If you are able to look at a chart and identify when the market is trending, then you can make a bundle using the below technique. If I had to pick one single trading technique in the world, this would be the one! ake sure to use proper position si!ing and money management with this one and you will encounter nothing but success! "efore I begin, howe#er, I should gi#e credit where credit is due, my friend $udo#ic o#er at broker%forex.fr (the original, &rench #ersion of forex%central.net) turned me on to this ama!ing trading technique. 'ow, on to the good stuff! ( % To keep things simple, let)s assume there is no spread. *pen a position in any direction you like. +xample, "uy -.( lots at (../0-. 1 few seconds after placing your "uy order, place a 2ell 2top order for -.0 lots at (../--. $ook at the $ots...

3 % If the T4 at (../5- is not reached, and the price goes down and reaches the 2$ or T4 at (..66-. Then, you ha#e a profit of 0- pips because the 2ell 2top had become an acti#e 2ell *rder (2hort) earlier in the mo#e at -.0 lots.

0 % "ut if the T4 and 2$ at (..66- are not reached and the price goes up again, you ha#e to put a "uy 2top order in place at (../0- in anticipation of a rise. 1t the time the 2ell 2top was reached and became an acti#e order to 2ell -.0 lots (picture abo#e), you ha#e to immediately place a "uy 2top order for -.5 lots at (../0- (picture below).

7 % If the price goes up and hits the 2$ or T4 at (../5-, then you also ha#e a profit of 0- pips!

8 % If the price goes down again without reaching any T4, then continue anticipating with a 2ell 2top order for (.3 lots, then a "uy 2top order for 3.7 lots, etc... 9ontinue this sequence until you make a profit. $ots, -.(, -.0, -.5, (.3, 3.7, 7./, ..5, (..3 and 0/.7. 5 % In this example, I)#e used a 0-:5-:0- configuration (T4 0- pips, 2$ 5- pips and ;edging <istance of 0- pips). =ou can also try (8:0-:(8, 5-:(3-:5-. 1lso, you can try to maximi!e profits by testing 0-:5-:(8 or 5-:(3-:0- configurations. 6 % 'ow, considering the spread, choose a pair with a tight spread like +>?:>2<. >sually the spread is only around 3 pips. The tighter the spread, the more likely you will win. I think this may be a @'e#er $ose 1gain 2trategy@! Aust let the price mo#e to anywhere it likesB you)ll still make profits anyway. 1ctually the whole @secret@ to this strategy (if there is any), is to find a @time period@ when the market will mo#e enough to guarantee the pips you need to generate a profit. This strategy works with any trading method. (2++ 9* +'T2 "+$*C))

1sian "reakout using $ine%( and $ine%7. =ou can actually use any pip%range you want. =ou Dust need to know during which time period the market has enough mo#es to generate the pips you need. 1nother important thing is to not end up with too many open buy and sell positions as you may e#entually run out of margin. COMMENTS: 1t this point, I hope that you can see the incredible possibilities that this strategy pro#ides. To sum things up, you enter a trade in the direction of the pre#ailing intraday trend. I would suggest using the ;7 and ;( charts to determine in which direction the market is going. &urthermore, I would suggest using the (8 or 0- as your trading and timing window. In doing this you will usually hit your initial T4 target .-E of the time and your hedge position will ne#er need to be acti#ated. 1s mentioned in point 6 abo#e, keeping spreads low is a must when using hedging strategies. "ut, also, learning how to take ad#antage of momentum and #olatility is e#en more important. To achie#e this, I would suggest looking at some of the most #olatile currency pairs such as the F"4:A4=, +>?:A4=, 1><:A4=, F"4:9;&, +>?:9;&, F"4:>2<, etc. These pairs will gi#e up 0- to 7- pips in a heartbeat. 2o, the lower the spread you pay for these pairs, the better. I would suggest looking for a forex broker with the lowest spreads on these pairs and that allows hedging (buying and selling a currency pair at the same time). I personally use &x4ro as their +>?:>2< spread is usually between ./ % (.5 pips during peak forex trading hours.

1s you can see from the picture abo#e, trading $ine ( and $ine 3 ((- pip price difference) will also result in a winning trade. This method is extremely simple, (. Aust choose 3 price le#els (;igh, $ow, you decide) and a specific time (you decide), if you ha#e a ;igh breakout then buy, if you ha#e a $ow breakout then sell. T4G2$G (;%$). 3. +#ery time you experience a loss, increase the buy:sell lots in this numerical sequence, (, 0, 5, (3, etc... If you choose your time and price range well, you will not need to acti#ate this many trades. In fact, you will #ery rarely need to open more than one or two positions if you properly time the market. 0. $earning to take ad#antage of both #olatility and momentum is key in learning to use this strategy. 1s I mentioned earlier, timing and the time period can be crucial for your success. +#en though this strategy can be traded during any market session or time of day, it needs to be emphasised that when you do trade during off%hours or during lower #olatility sessions, such as the 1sian session, it will take longer to achie#e your profit obDecti#e. Thus, it)s always best to trade during the o#erlapping hours of the +uropean:$ondon sessions and:or the 'ew =ork session. In addition, you should keep in mind that the strongest momentum usually occurs during the opening of any market session. Therefore, it)s during these specific times that you will trade with a much higher probability of success. TI I'F H * +'T> G 2>99+22!

arch 3., 3--6 was a typical example of a dangerous day because the markets did not mo#e much. The best way to o#ercome such a situation is to be able to recogni!e current market conditions and know when to stay out of them. ?anging, consolidating, and small oscillation markets will kill anyone if not recogni!ed and traded properly (you should, in fact, a#oid them like the plague!). ;owe#er, ha#ing a good trading method to help you identify good setups will help you eliminate the need for multiple trade entries. In a way, this strategy will become a sort of insurance policy guaranteeing you a steady stream of profits. If you learn to enter the markets at the right time (I sometimes wait for price to pullback or throwback a bit before Dumping in), you will find that you will usually hit your initial T4 target .-E of the time and price will not get anywhere close to your hedge order or your initial stop loss. In this case, the hedging strategy replaces the need for a normal stop loss and acts more as a guarantee of profits. The abo#e examples are illustrated using mini%lotsB howe#er, as you become more comfortable and proficient with this strategy, you will gradually work your way up to trading standard lots. The consistency with which you will be making 0- pips any time you want will lead to the confidence necessary to trade multiple standard lots. *nce you get to this le#el of proficiency, you profit potential is unli ited. Chether you reali!e it or not, this strategy will enable you to trade with #irtually no risk. !t"s li#e ha$ing an %TM &ebit Card to the 'orld (an#)))))) (In exchange for sharing this ama!ing technique with you, I would truly appreciate it if you would pay me back by opening up a forex trading account by going through the links on my website here I &x4ro is the broker I use as their spreads are #ery low and they ha#e a great reputation (click here to open an &x4ro account) I no extra commissions will be charged and as you become rich I will also recei#e a small percentage of the spread. +nDoy this strategy, ha#e a successful future and spend time with your family! B%) 2hare your experience with this strategy in the &orex%9entral.net forum